TIDMAFP
RNS Number : 9588X
African Pioneer PLC
28 April 2023
28 April 2023
African Pioneer Plc
("African Pioneer" or the "Company")
Final Results for period to 31 December 2022
African Pioneer plc ("APP" or the "Company"), the exploration
and resource development company with projects located in Namibia,
Botswana and Zambia, reports its full year results for the year
ended 31 December 2022.
The Annual Report and Financial Statements for the year ended 31
December 2022 will shortly be available on the Company's website at
https://africanpioneerplc.com/ . A copy of the Annual Report and
Financial Statements will also be uploaded to the National Storage
Mechanism where it will be available for viewing at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
Please note that page references in the text below refer to the
page numbers in the Annual Report and Financial Statements.
This announcement contains inside information for the purposes
of Article 7 of Regulation 2014/596/EU which is part of domestic UK
law pursuant to the Market Abuse (Amendment) (EU Exit) regulations
(SI 2019/310).
For further information, please contact:
African Pioneer Plc
Colin Bird
Executive Chairman +44 (0) 20 7581 4477
Beaumont Cornish (Financial Adviser)
Roland Cornish +44 (0) 20 7628 3396
Novum Securities Limited (Broker)
Jon Belliss +44 (0) 20 7399 9400
or visit https://africanpioneerplc.com/
KEY HIGHLIGHTS
-- Consolidated Net assets - GBP 5,238,820 (2021 restated - GBP 5,941,948)
-- Consolidated (Loss)/Profit - Loss - GBP (670,871) (2021 - Profit restated - GBP273,471)
-- The Group reports its results and raises funds in Pounds Sterling (GBP).
-- Its primary assets are in Namibia, Botswana and Zambia
CHAIRMAN' STATEMENT
Dear Shareholder,
African Pioneer has continued to make good progress during the
period under review.
The Company has the benefit of major mining company shareholders
and joint venture partners and/or option partners and is involved
in two large exploration projects in Northwest Zambia and
Botswana.
In Zambia the company has granted an option with First Quantum
Minerals Ltd ("First Quantum") over its North-western exploration
projects and in Botswana the Company has granted Sandfire Resources
Limited ("Sandfire") an option over a number of its Kalahari
Copperbelt projects, whilst retaining some licences for its own
exploration activities.
In Namibia the Company has a significant exploration project,
which during the year was granted a mining licence and plans are
underway to bring this licence to account and commence mining
activities.
During the year we carried out a drilling exercise on the
Ongombo licence and had some considerable success in identifying
near surface material, which will allow the company to consider
when mine planning, a 2-3 year mine life open pit, which will
facilitate entry into the proposed underground mine. During the
period under review and post the reporting period, we have been
re-evaluating the ore resource at Ongombo and anticipate reporting
an updated resource in Q2 2023, which takes into consideration the
contribution of the gold, which is in association with copper and
the recently drilled out open pit resource.
We are confident that our final resource model will lead to a
meaningful mining situation with initial open pit and less
complicated mining approach.
In Zambia, during the option period, First Quantum have reported
considerable success with their initial fieldwork and drilling
programmes. Their work has covered all aspects of exploration,
including deep holes. The outcome has shown the project to be
extremely high in potential with First Quantum stating their
believe that the orebody style resembles that of the Kamoa-Kakula
mine in the nearby Congo and the Western Foreland style
mineralisation associated with Kamoa. This represents a potential
significant major discovery for Zambia, First Quantum and of
course, African Pioneer.
Apart from the deeper style Kamoa-Kakula mineralisation, there
has been near surface mineral discoveries with indication of grades
somewhat higher than traditional Copperbelt. This mineralisation is
again, considered to be similar to Kolwezi mineralisation, which
supported major high-grade mining in the DRC.
We are extremely excited about the prospects of our licences and
look forward to a year of more intensive exploration and therefore
more definition of overall potential.
The Botswana joint venture with Sandfire continues
satisfactorily and our own exploration, which intercepted the
sought after lithology has been reinterpreted and we are excited
about the prospects and the regions yet to be tested. The Kalahari
Copperbelt has been the region of much interest over the last 18
months, with old theories and models being challenged by new
discoveries and drilling results.
Most of this new work adds value to our positions and reinforces
our believe that one or more licences have the potential to enhance
considerable shareholder value to the African Pioneer holders.
Despite considerable headwinds the copper price stayed strong
throughout the period, with forecast for the coming years, ranging
from USD10-USD15,000 per tonne.
We believe the crunch time for the supply side for copper will
begin during mid '24 and continue through mid '25 and beyond. This
will make all junior mining companies who have good copper
resources in reliable jurisdictions, targets for acquisitions for
by major mining companies, traders and others.
We are confident that African Pioneer has an excellent copper
resource base and is well positioned for such corporate
activity.
I thank my fellow directors and management for their efforts
during the period under review and beyond and we all continue to
live in anticipation of small company renaissance, which is
inevitable but long awaited.
Yours sincerely,
Colin Bird, Chairman
African Pioneer Plc
28 April 2023
BOARD OF DIRECTORS AND SENIOR MANAGEMENT
Colin Bird - Executive Chairman
Colin is a chartered mining engineer and a Fellow of the
Institute of Materials, Minerals and Mining with more than 40
years' experience in resource operations management, corporate
management, and finance. Colin has multi commodity mine management
experience in Africa, Spain, Latin America and the Middle East. He
has been the prime mover in a number of public company listings in
the UK, Canada and South Africa. His most notable achievement was
founding Kiwara Resources Plc and selling its prime asset, a copper
property in Northern Zambia, to First Quantum Minerals for US$260
million in November 2009.
Raju Samtani - Finance Director
Raju is currently finance director of Tiger Royalties and
Investments Plc, listed on AIM. His previous experience includes
three years as Group Financial Controller at marketing services
agency WTS Group Limited, where he was appointed by the Virgin
Group to oversee their investment in the WTS Group Ltd. More
recently he was finance director of Kiwara Plc which was acquired
by First Quantum Minerals Ltd in January 2010. Over the last few
years, he has been involved in senior managerial positions for
several AIM/Johannesburg Stock Exchange listed companies
predominantly in the resource sector and has also been involved in
FCA compliance work within the investment business sector.
Christian Cordier - Business Development Director
Christian has had considerable involvement in corporate finance
and investments in both public and private mining and exploration
companies for over 22 years. His portfolio includes joint ventures
with major international mining houses, investments in listed
companies in the United Kingdom, Australia and Southern Africa as
well as private mining operations. He has extensive experience in
sourcing natural resource projects and nurturing them through the
value curve by packaging and arranging venture funding, managing
the permitting and exploration process, negotiating off-take
agreements and the formation of a strong management team. He worked
as CFO and senior accountant as well as company secretary for
private and public companies and is a member of SA Institute for
Professional Accountants ("SAIPA"). Christian has done transactions
in Coal, Platinum Group Metals, Chrome, Copper, Potash, Phosphates,
Diamonds, Gold, Lithium and Manganese. Christian focuses on
business development and wealth creation for private and publicly
listed companies in the mining and exploration sector.
Kjeld Thygesen - Independent Non-Executive Director
Kjeld Thygesen is mining investment veteran of more than 45
years. After being a mining analyst at James Capel in the latter
half of the 1970's he was manager of the commodities department at
Rothschild Asset Management between 1980-89. In 1990 he formed Lion
Resource Advisors as a specialist adviser in the mining and natural
resource sectors. LRA was the advisor to the Midas Fund in the US
between 1992 - 2000, which was one of the top performing finds
during that period. From 2002-2008 he was Investment director of
Resources Investment Trust, a London listed investment trust which
returned a threefold investment during that period. He has served
on several mining company boards over the past twenty years.
James Cunningham-Davis - Non-Executive Director
James Cunningham-Davis is a qualified Solicitor and a Fellow of
the Chartered Institute for Securities & Investment, founder of
the law firm Buckingham Legal and founder and Managing Director of
Cavendish Trust Company Ltd, and Cavendish Secretaries Limited, all
of which are headquartered in the Isle of Man. Cavendish Trust and
Cavendish Secretaries provide professional services to many private
companies and various listed companies, across a number of sectors
of industry and finance in many jurisdictions, though particularly
in the Natural Resources/Mining, Technology and Property sectors.
James has worked within the international legal and corporate
finance/service sectors for more than 25 years and has held many
directorships in both private and listed companies.
FINANCIAL CORPORATE AND OPERATIONAL REVIEW
INTRODUCTION
African Pioneer Plc a company engaging in development of natural
resources exploration projects in Sub-Saharan Africa presents its
year-end results for the year ended 31 December 2022.
The Directors are required to provide a year-end report in
accordance with the Financial Conduct Authorities ("FCA")
Disclosure Guidance and Transparency Rules ("DTR"). The Directors
consider this Financial, Corporate and Operational Review along
with the Chairman's Report, the Strategic Review and the Director's
Report provides details of the important events which have occurred
during the period and their impact on the financial statements as
well as the outlook for the Company going forward.
The Company's short to medium term strategic objectives are to
enhance the value of its mineral resource Projects through
exploration and technical studies conducted by the Company or
through joint venture or other arrangements (such as the Option
Agreement of selected Botswanan Projects with Sandfire Resources
and also the more recent the option agreement with First Quantum on
its 4 North-West Zambian licences) with a view to establishing the
Projects can be economically mined for profit. With a positive
global outlook for both base and precious metals, the Directors
believe that the Projects provide a base from which the Company
will seek to add significant value through the application of
structured and disciplined exploration.
Financial Review
Financial highlights:
-- Consolidated (Loss)/Profit Loss: GBP671k GBPloss after tax
(2021 restated : GBP273k - profit)
-- Approximately GBP72k cash at bank at the period end (2021: GBP1.19m).
-- The basic and diluted profit (losses) per share are summarised in the table below
Profit (Loss)
per share (pence)
2021
2022 restated
Note
Basic 6 ( 0.35)p 0.24p
Note
Diluted 6 (0.29)p 0.20p
-- Net asset value as at 31 December 2022 was GBP5.36m (31 December 2021 GBP 6.06m)
Fundraisings:
The Company did not undertake any fundraisings during the period
as it had sufficient working capital from the funds raised in 2021
at Admission and the option payment received from Sandfire
Resources Limited in relation to certain of the Botswana
Projects.
Corporate Review
Company Board: The Board of the Company comprises Colin Bird,
Executive Chairman Raju Samtani, Finance Director Christian
Cordier, Business Development Director Kjeld Thygesen, Independent
Non-executive Director James Nicholas Cunningham-Davis,
Non-executive Director.
Listing: The Company was admitted to the Official List (Standard
Segment) and commenced trading on the Main Market for listed
securities of the London Stock Exchange on 1 June 2021 (the
"Listing" or "IPO") .
Corporate Transactions: On 19 January 2022, the Company and its
80% owned subsidiary African Pioneer Zambia Ltd ("African Pioneer
Zambia") entered into an option agreement with First Quantum
Minerals Ltd ("First Quantum") (listed on the Toronto Stock
Exchange) in relation to 4 of the 5 Zambian exploration licences
held by African Pioneer Zambia (the "Option Agreement").
Highlights of Option Agreement:
-- The four exploration licences the subject of the Option
Agreement are in the highly prospective Central Africa Copperbelt
in northwest Zambia which is the largest and most prolific
mineralized sediment- hosted copper province in the world and are
located less than 100km from First Quantum's giant Sentinel copper
mine.
-- The exploration licenses include geological formations
similar in age and rock type to that hosting the major copper
deposits of the Copperbelt
-- During the initial 18-month option period First Quantum has
the right but not the obligation to spend US500,000 on each of the
exploration licences 27767-HQ-LEL, 27768-HQ-LEL, 27770-HQ-LEL, and
27771-HQ-LEL (the "Zambian Projects"). At this stage First Quantum
will not have earned any shares in African Pioneer Zambia, just the
right to proceed to take one or more of the properties into the
First Earn In Period by issuing an Option Exercise Notice.
-- During the First Earn In Period, First Quantum then has 2
years when it has the right but not the obligation to prepare a
Technical Report in respect of the Zambian Projects demonstrating
an Indicated Mineral Resource of at least 300,000 tonnes of
contained copper (the "Technical Report Requirement"). First
Quantum is to fund the Technical Report. Once the Technical Report
is issued First Quantum has the right to be issued shares equal to
a 51% shareholding in African Pioneer Zambia. This will also
trigger the Second Earn-In Period.
-- In the Second Earn-In Period First Quantum shall have the
right but not the obligation to complete all necessary mining,
metallurgical and development studies to establish a mine at the
Property and make a public announcement that it intends to proceed
towards commercial development of a Mine on the Property (a
"Decision to Mine"). First Quantum is to fund all costs related to
the Decision to Mine. Once First Quantum announces a Decision to
Mine First Quantum has the right to be issued shares in African
Pioneer Zambia to increase their 51% shareholding in African
Pioneer Zambia to 75%.
Additional Information
First Quantum: is one of the world's top 10 copper producers
operating in several countries including Zambia where it owns the
Sentinel and Kansanshi mines in North West Zambia and is known for
its specialist technical engineering construction and operational
skills which have allowed it to develop and successfully run
complex mines and processing plants. Colin Bird, the chairman of
African Pioneer, was a founder of and floated Kiwara Plc in around
2008 which discovered copper in northwest Zambia and was sold to
First Quantum in 2009 for U$260 million. First Quantum then
developed the Kiwara Plc projects into the Sentinel mine which is
the world's 14(th) largest copper mine.
Zambian Projects: The licence package covers part of the
north-western extension of the Zambian Copperbelt. The properties
are located within 80-100km of First Quantum's giant Sentinel
copper mine, one of the largest copper mines in Africa, with a
reported Measured and Indicated Resources of 891Mt @ 0.45% Cu. They
also lie close to the Enterprise nickel deposit (37.7Mt @ 1.03% Ni)
which is being reportedly moved towards development.
The Zambian Projects lie on the Lufilian Fold Belt in the Domes
region of the Central African Copperbelt, straddling the western
boundary of the Kabompo Dome, underlain principally by rocks of the
Lower and Upper Roan, as well as the stratigraphically higher
Kundelungu and Nguba Groups. This geological package is similar in
age and rock type to that hosting the major copper deposits of the
Copperbelt, including Sentinel. Therefore, the licence areas are
considered to be strongly prospective for Copperbelt-type
copper/cobalt and/or nickel deposits. They are historically
underexplored, representing the westerly extension of the
Copperbelt which has not been investigated in detail, as previous
work focussed primarily on the central part of the zone.
On the Luamata South licence (27771-HQ-LEL), African Pioneer has
acquired a valuable exploration package arising from recent work by
MMG Zambia Ltd ('MMG') which highlights strong soil/airborne
magnetic targets that were not drill tested, as MMG pulled out of
Zambia. The Samuteba East licence (27770-HQ-LEL) was recently held
by Anglo American which also carried out airborne magnetic
surveying and reconnaissance soil sampling before exiting the
Copperbelt. The soil data highlights several copper anomalies of
considerable interest.
Exploration licence 27769-HQ-LEL owned by African Pioneer Zambia
which is not covered by the Option Agreement is in the Zambezi area
located within the Zambezi belt of southern Zambia that hosts a
Lower Katanga supergroups succession will be transferred from
African Pioneer Zambia to a new Zambian company to be owned 80% by
the Company and 20% by its local partners.
Operational Review
The Company completed an Initial Public Offering (IPO) on the
Standard List of the London Stock Exchange and the acquisition of
its projects in Namibia, Zambia and Botswana in 2021 and in 2022
granted an option to First Quantum in relation to 4 of the 5
Zambian exploration licences held by African Pioneer Zambia more
details of which are provided in the Corporate Highlights section
of this review.
Technical review of Projects: After the IPO and having acquired
its projects in Namibia, Zambia and Botswana, the Company commenced
technical reviews and / or programmes on its the projects located
in Namibia and Zambia. The primary metal in all countries is copper
with by-product potential in all of our projects. In Zambia we have
potential for cobalt, in Botswana for silver and in Namibia for
gold.
Namibia:
The Company has a 85% interest in the Namibian Projects and on
20 December 2021 announced a 3.76 Mt increase in the Measured &
Indicated Mineral Resources of the Ongombo Project Mineral
Resources to 10.47Mt @ 1.4% Cu, 7g/t Ag at a cut-off of 1.0% Cu,
with 0.35g/t Au categorised as Inferred following a JORC (2012)
compliant review by external consultant, Red Bush Analytics, the
submission of a mine application and a positive scoping study by
Practara Consulting.
On 24 May 2022, a shallow diamond drilling programme commenced
on the Ongombo Project, Namibia and on 29 September 2022 the
Company announced
Highlights:
-- A Mining Licence has been approved by the Ministry of Mines and Energy of Namibia
-- The Company is in the process of completing an Environmental
and Social Impact Assessment ("ESIA") which will trigger the start
of the mine development process
-- The completed drill programme is targeting potential
near-surface copper - gold mineralisation not included in the
existing underground mineral resource estimate. 26 holes completed
to date with copper - gold mineralisation present in 25 holes
-- Peak assay intercepts from near-surface drilling include
5.39% Cu eq over 0.82m, 4.72% Cu eq over 1.15m, 3.96% Cu eq over
1.15m, 3.24% Cu eq over 0.945m, 2.64% Cu eq over 1.39m and 2.46% Cu
eq over 1.42m
-- A zone of near-surface copper mineralisation extending over
an area of approximately 750 metres by 185 metres at an average
grade of greater than 1% Cu
-- A coincident gold zone covering an area of 500 metres strike
length and a variable width of between 50 metres and 185 metres at
an average gold grade of greater than 0.4g/t Au
-- External resource consultant to undertake a mineral resource
estimate for near-surface mineralisation once all assay data has
been received.
Update on the Near-Surface Mineralisation & Drill
Programme
A zone of presumed mineralisation extending approximately 180m
from the outcropping gossan that identifies the Ongombo orebody at
surface down-dip has been drilled. Historic low-density drilling
failed to define any mineralisation and it was assumed that as the
orebody progressed up-dip towards the gossan outcrop that sulphide
mineralisation in the form of pyrite and chalcopyrite would give
way to oxides of copper. Recent drilling has broadly defined a zone
of predominantly copper sulphide mineralisation to depths of around
10 to 15m vertical depth.
On completion of the balance of drilling and the receipt of
outstanding assays, a mineral resource estimate will be generated
by external consultants that is expected to add to the existing
underground resource and generate a new open pittable mineral
resource. Open pit excavation will potentially reduce the amount of
primary underground development required to access underground ore
by stripping waste rock to expose the mineralised horizon and
ultimately leaving a highwall that can be used to develop a portal
for the planned decline. Work will be done to optimise the open pit
resource to generate a mineable resource sufficient to feed a plant
for a minimum of 12 months whilst primary development advances to
access underground ore.
Further studies are required to confirm the amenability of
Ongombo ore to both standard flotation processing and gravity and
XRT pre-concentration methods. Provisional assessment indicates
that the ore is typical of that found on this part of the Matchless
Belt and therefore suitable for recovery of copper and gold through
a variety of recovery methods.
Table 1: Ongombo Near-surface Drill Programme Selected Average
Weighted Assay Results for First 26 Drillholes
Borehole ID From To Mineralised Grade Grade Grade
(m) (m) Width (% Cu) (g/t Au) (Cu
(m) eq)*
APD001 11.81 14.81 3.0 0.42 0.78 0.96
------ ------ ------------ -------- ---------- ------
APD002 21.25 22.2 0.945 2.42 1.19 3.24
------ ------ ------------ -------- ---------- ------
APD003 8.82 10.37 1.55 2.18 0.50 3.0
------ ------ ------------ -------- ---------- ------
APD004 20.5 21.5 1.0 0.75 0.27 0.94
------ ------ ------------ -------- ---------- ------
APD005 11.69 13.11 1.42 2.12 0.49 2.46
------ ------ ------------ -------- ---------- ------
APD006 36.63 38.04 1.41 0.73 0.15 0.83
------ ------ ------------ -------- ---------- ------
APD007 50.42 51.42 1.0 0.47 0.14 0.56
------ ------ ------------ -------- ---------- ------
APD008 50.58 51.73 1.15 2.95 1.47 3.96
------ ------ ------------ -------- ---------- ------
APD009 30.41 31.80 1.39 2.36 0.41 2.64
------ ------ ------------ -------- ---------- ------
APD010 7.9 9.0 1.1 0.11 0.66 0.56
------ ------ ------------ -------- ---------- ------
APD011 16.7 17.48 0.78 0.69 0.17 0.80
------ ------ ------------ -------- ---------- ------
APD012 33.26 34.05 0.785 1.11 0.21 1.25
------ ------ ------------ -------- ---------- ------
APD013 46.04 47.2 1.15 4.44 0.40 4.72
------ ------ ------------ -------- ---------- ------
APD014 66.74 68.79 2.05 0.60 0.14 0.70
------ ------ ------------ -------- ---------- ------
APD015 39.14 39.82 0.68 1.03 0.19 1.16
------ ------ ------------ -------- ---------- ------
APD016 25.88 27.25 1.37 0.98 0.31 1.19
------ ------ ------------ -------- ---------- ------
APD017 16.0 16.57 0.57 1.33 0.33 1.56
------ ------ ------------ -------- ---------- ------
APD018 No Mineralised Intercept
----------------------------------------------------------
APD019 27.33 28.56 1.23 1.48 0.26 1.65
------ ------ ------------ -------- ---------- ------
APD020 53.9 54.72 0.82 4.59 1.17 5.39
------ ------ ------------ -------- ---------- ------
APD021 41.27 43.0 1.73 1.56 0.33 1.78
------ ------ ------------ -------- ---------- ------
APD022 13.86 14.84 0.975 2.03 0.21 2.17
------ ------ ------------ -------- ---------- ------
APD023 50.33 51.77 1.44 1.55 0.73 2.05
------ ------ ------------ -------- ---------- ------
APD024 66.47 67.08 0.61 0.99 0.32 1.21
------ ------ ------------ -------- ---------- ------
APD025 38.49 39.62 1.13 0.90 0.15 1.00
------ ------ ------------ -------- ---------- ------
APD026 19.59 21.42 1.83 1.31 0.43 1.60
------ ------ ------------ -------- ---------- ------
*A copper price of US$8,000 and a gold price of US$1,700 were
used for the purposes of calculating a copper equivalent grade.
The Company has elected to investigate the potential for an open
pit to mine copper sulphides and oxides. Oxides are known to occur
at or near surface from the outcrop of the Ongombo deposit
coincident with the Central Shoot. Initially assumed to extend for
a strike length of approximately 350m, recent drilling has extended
the zone coincident with copper grades >1% Cu to over 750m.
Drilling has also demonstrated that the down-dip extension from the
gossan outcrop extends in some locations to approximately 185m,
considerably wider (in the horizontal plane) than initially
anticipated at 100 to 150m.
Subject to mineral resource estimation work following the
completion of drilling and the return of assay data, indications
are that a viable copper resource suitable for open pit extraction
may occur. There also appears to be scope to add to the existing
underground resource with deeper mineralised intercepts expected to
be beyond any future pit floor. The bulk of mineralisation defined
to date with the exception of the zone closest to the Ongombo
gossan outcrop and to a vertical depth of between 10 and 15m is
sulphide-type mineralisation dominated by pyrite and
chalcopyrite.
The Ongombo orebody plunges to the NNE and an area has broadly
been defined suitable for mine infrastructure where any future ore
extraction would be from underground.
Environmental and Social Impact Assessment ("ESIA")
The ESIA was submitted in Q4 202 and post year end on 25 April
2023 the award of an Environmental Clearance Certificate for the
Ongombo (copper-gold) Project located within Exclusive Prospecting
Licence EPL 5772 was announced.
Zambia :
As mentioned in the Corporate Transactions summary above on 19
January 2022 African Pioneer Zambia Ltd entered into an option
agreement with First Quantum (listed on the Toronto Stock Exchange
FM.TO) in relation to 4 of the 5 Zambian exploration licences held
by African Pioneer Zambia.
On 24 October 2022 and on 6 February 2023 the Company has
provided updates on the ongoing exploration activities undertaken
by First Quantum during Q3 and Q4 2022 on the 4 Zambia licences
subject to the Option Agreement the Company believes these updates
to be very encouraging and below summarise the highlights and also
provide detail of the exploration activities during the second half
of 2022. We have provided this information in the following four
sections:
1. Highlights of Q3 2022 exploration undertaken by First Quantum
(24 October 2022 announcement)
2. Highlights of Q4 2022 exploration undertaken by First Quantum
(6 February 2023 announcement)
3. Work Completed Q3 2022
4. Work Completed Q4 2022
5. Planned Exploration Work
1. Highlights of Q3 2022 exploration undertaken by First Quantum
(24 October 2022 announcement)
-- The September 2022 latest quarterly report from joint venture
partner First Quantum Minerals demonstrates very positive results
including confirmation of copper mineralisation in drill testing of
three new targets.
-- Soil geochemical surveys were carried out over seven targets.
-- Air-core drilling was carried out over 3 targets defined by
soil geochemistry has discovered copper in veins and disseminations
at all the prospects tested to date, with visual estimations
ranging from trace up to 2% copper mineralisation over some 75m in
hole TUAC012.
-- Completion of an audio-magnetotelluric ("AMT") geophysical
survey totalling 54.9-line km has detected architectural patterns
typically associated with Congolese-type copper mineralisation
presenting an exciting new exploration concept in parallel with the
existing targets.
-- A deep drillhole has commenced to examine the prognosis that
the geologic setting may be analogous to the 'Western Foreland' in
the nearby DRC, host to Ivanhoe Mines Limited's recently
commissioned Kamoa mine, reported to become one of the largest
copper mines in the World.
2. Highlights of Q4 2022 exploration undertaken by First Quantum
(6 February 2023 announcement)
-- The fourth quarter 2022 report from joint venture partner
First Quantum confirmed encouraging copper oxide intercepts at
three shallow drill targets and potentially significant copper
mineralisation in two holes on a separate licence being explored
for geological settings similar to the giant Kamoa-Kakula deposits
in the DRC.
-- Preliminary analytical results for shallow air-core drilling
completed in the previous quarter over soil geochemical targets on
licence 27770-HQ-LEL recorded several copper mineralised intervals
hosted in black shales on the Turaco and Eagle targets - final
assay results are awaited.
-- Two deep drillholes were completed 5km apart at the Ikatu
target on licence 27767-HQ-LEL to test if the geologic setting is
analogous to the 'Western Foreland' domain in the nearby DRC, host
to Ivanhoe Mines Limited's Kamoa-Kakula mines, projected to be one
of the highest grade major copper mines in the world. The target
Diamictite unit was encountered in both holes, with visible copper
mineralisation being identified at different stratigraphic levels
in each hole:
o Hole IKDD001A intersected chalcocite, bornite and chalcopyrite
copper mineralisation about 180m below the Diamictite unit over
2.9m from 430.9m depth
o Hole IKDD002 encountered a 2m zone of strong alteration and
irregular disseminated chalcocite mineralisation at the base of the
target Diamictite unit at about 600m depth
-- First Quantum considers it is a positive sign to see copper
mineralisation at the same Grand Conglomerat/Diamicrite
stratigraphic level as at Kamoa-Kakula in DRC.
-- Future work planned by First Quantum includes additional AMT
geophysical survey lines in 27767-HQ-LEL, further diamond drilling
at the Ikatu target, follow up diamond drilling at the Turaco and
Eagle targets and aircore drilling of additional targets in 27770-
and 27771-HQ-LEL.
3. Work Completed Q3 2022
Soil Sampling
Infill soil sampling was undertaken at seven targets across
large-scale exploration licences 27770- and 27771-HQ-LEL. Analysis
was carried out in-house by pXRF. The best results received were
from the Eagle and Turaco targets in 27770-HQ-LEL (Kasongo licence)
and Kanyika and Chipopa in 27771-HQ-LEL (Luamata South licence).
Geological mapping and rock sampling was also carried out at all
seven targets across both licences.
Receipt of XRF analyses for the bulk of the soil samples
collected and subsequent interpretation has generated several
coherent zones of copper anomalism over significant areas, up to
1,406ppm Cu.
At Turaco, significant Cu soil anomalism was encountered (>
250ppm Cu over 2.3 x 2.2km area, up to 1,406ppm Cu) adjacent to a
major structure and overlying an interpreted salt diapir in
AMT.
At Eagle, significant soil Cu anomalism occurs (5 x 2km, up to
795ppm Cu) adjacent to a major structure and overlying an
interpreted salt diapir in AMT.
At Kanyika, a string of high tenor soil Cu anomalies was
delineated (up to 983ppm Cu) associated with a major NE-trending
structure.
At Chipopa, a strong soil Cu anomaly occurs straddling a major
lithotectonic boundary (>150ppm Cu over 2.3 x 1.3km, up to
639ppm Cu).
Air-Core Drilling
Air-core drilling of the Turaco, Eagle and Kanyika targets
totalled 66 holes for 4,028m. Such drilling is designed to provide
first-pass information on the shallow geology and mineralisation
beneath sand and laterite cover rather than a definitive target
test.
At Turaco, copper mineralisation encountered included drillhole
TUAC012 which intersected carbonaceous shale from surface with 1%
malachite, which transitioned to a lighter grey talc-altered shale
with dolomite-chalcopyrite veins (up to 3% volume) after 29m depth.
Dolomite-chalcopyrite veins continued to end-of-hole (75m) and
after 70m there is very fine-grained disseminated chalcopyrite (up
to 2%, 0.8% Cu on pXRF) within strongly silicified shale.
At Eagle, the most frequently encountered units were strongly
altered shales, breccias and mafic intrusives. Several drillholes
intersected a vuggy ferruginous silicified rock with Mn-oxide
coating fractures which yielded anomalous Cu and Ni on pXRF
(>1,200ppm Cu). This strongly silicified rock was not possible
to drill through with air-core and was typically found adjacent to
altered breccias. Best visible mineralisation was from the West of
the target area in hole EAAC014, which intercepted a zone from
99-103m of brecciated carbonaceous shale with dolomitic infill with
up to 2% disseminated chalcopyrite.
At Kanyika, in the NW of the area drilled, there is a doleritic
sill overlain by a micaceous sandstone and quartzite (possibly
contact metamorphosed). The dolerite often has patches of strong
alteration and intense calcite-hematite veining, sometimes
associated with minor disseminated chalcopyrite and/or pyrite (up
to 0.5%).
Audio Magneto-Tellurics (AMT) Geophysical Survey
This survey was completed the across the 27770-HQ-LEL (Kasongo)
and 27767-HQ-LEL (Ikatu) licences in June 2022. In total, 54.9 line
km was surveyed in 2022. Such deep penetrating surveys can provide
important information on the structural and stratigraphic framework
of the region to assist with target selection and evaluation.
AMT results from Kasongo suggest soil anomalies could be related
to salt diapirism adjacent to major structures (e.g. classic
Congolese-style). AMT lines within the Ikatu licence suggest that
the Western Foreland domain boundary passes through the licence.
This domain in Zambia could offer prospective stratigraphy like the
world-class Kamoa-Kakula deposit complex in the DRC.
A 'framework' diamond drillhole was planned to test stratigraphy
within the Western Foreland domain at Ikatu to see if a conductive
unit within the sedimentary package here overlies basement at
depth.
4. Work Completed Q4 2022
Air-Core Drilling Analytical Results
pXRF analytical results have now been received for sample pulps
from the 2022 air-core shallow drilling programme at Turaco and
Eagle targets in 27770-HQ-LEL. Selected intervals of interest are
shown in Table 1 below. At Turaco, best results were from the north
of the target where drillhole TUAC012 intersected several
significant copper intercepts within a silicified and talc-altered
black shale, including an oxide mineralised zone with 8m @ 1.19% Cu
from 5m depth. Elsewhere at Turaco, another drillhole intersected
1m @ 1.14% Cu within a thin black shale unit.
At Eagle target, the best intercept was in drillhole EAAC005
which intersected 29m @ 0.33% Cu, including 7m @ 0.61% Cu within a
strongly chlorite-clay altered rock.
Table 1 - Selected pXRF* Analytical Intervals From
Aircore Drilling Programme
Target Hole No. Depth Depth Interval Cu%
From (m) to (m) (m)
----------- ----------- -------- --------- -----
Turaco TUAC012 5 20 15 0.80
----------- ----------- -------- --------- -----
incl. 5 13 8 1.19
--------------------- ----------- -------- --------- -----
30 36 6 0.34
--------------------- ----------- -------- --------- -----
44 57 13 0.73
--------------------- ----------- -------- --------- -----
61 75 14 0.57
--------------------- ----------- -------- --------- -----
TUAC017 66 67 1 1.14
--------------------- ----------- -------- --------- -----
Eagle EAAC005 37 66 29 0.33
----------- ----------- -------- --------- -----
incl. 46 53 7 0.61
--------------------- ----------- -------- --------- -----
It is planned to send samples from TUAC012 for a 4-acid ICP
analysis with ALS Global laboratories in Johannesburg to check for
cobalt and other metal contents not possible to analyse with
pXRF.
Drillholes adjacent to TUAC012, interpreted to be within the
footwall of the mineralisation in TUAC012, exhibit strong magnesian
hydrothermal alteration within shales, breccias and diamictite.
These drillholes also contain abundant pyrite mineralisation as
well as minor chalcopyrite.
'Framework' Diamond Drilling - Ikatu Target
Two diamond drillholes were successfully completed at the Ikatu
target about 5km apart within the Western Foreland domain in
licence 27767-HQ-LEL. Both holes encountered copper mineralisation
at two different stratigraphic positions.
The first drillhole (IKDD001A, 603.0 m), intercepted a
diamictite unit from 229m to 252m, but with no visible copper
mineralisation. The diamictite has an oxidised sandstone matrix as
opposed to the reduced diamictite which hosts copper mineralisation
at Kamoa-Kakula in DRC. However, at greater depth in IKDD001A, a
2.9m intersect of copper mineralisation (chalcocite, bornite and
chalcopyrite) was encountered from 430.9m to 433.8m at the top of a
sequence of reduced rhythmites (sandstone-siltstone and shale
interbeds).
The second drillhole (IKDD002, 650.3m) also intersected the
diamictite unit from 593.3m to 602.3m. For the most part, the
diamictite unit is hematitic and oxidized, as in IKDD001A, but at
the base of the unit there is a 2m interval with strong chlorite
alteration and disseminated chalcocite mineralisation selectively
targeting certain clasts. First Quantum considers it is a positive
sign to see copper mineralisation at the same part of the
stratigraphy as at Kamoa-Kakula in DRC.
No analytical information is available as yet for the
mineralisation encountered in these holes. First Quantum plans to
send half core samples to the ALS Global laboratory in Johannesburg
for 4-acid ICP analysis.
Air Core sampling / pXRF analysis methodology
Each one metre interval Air Core sample is riffle split before
being despatched to Intertek prep lab in Kitwe, Zambia. Samples are
dried at 1050degC for 8 hours, pulverised and sieved to 180 micron
(SP13 method). The prepared samples were then transported to an
in-house lab at Kansanshi, where the powdered pulps are analysed by
a portable X-ray fluorescence (pXRF) instrument, analysing for 28
elements. The pXRF analysis includes the use of regular standards
and blanks for calibration however some variation to wet assay
laboratory techniques can be expected and results are therefore
considered indicative only
5. Planned Work
Further planned work includes:
3/4 Additional AMT survey lines in 27767-HQ-LEL
3/4 Further diamond drilling at Ikatu target in 27767-HQ-LEL
3/4 AC drilling of additional targets in 27770- and 27771-HQ-LEL
3/4 Sampling of remaining soils in 27771-HQ-LEL (Chibwika East)
3/4 Mapping and soil sampling in 27767- and 27768-HQ-LEL
3/4 Follow up diamond drilling at Turaco and Eagle targets
Botswana:
On 4 October 2021 the Company announced that it had entered into
a two-year option agreement with ASX listed Sandfire Resources
Limited (ASX:SFR) ("Sandfire") in relation to 4 of its 8 Botswana
prospecting licences for a cash payment of US$500,000 and the issue
of 107,272 Sandfire shares (share price on 3 May 2022 - A$5.60 -
approx. GBP3.17) and a 24 months exploration expenditure commitment
of US$1,000,000 (the "Botswana Option Agreement").
Post the period end on 29 March 2023 the Company announced an
update on exploration completed and planned over the Kalahari
Copper Belt Licences which are the subject of the Botswana Option
Agreement.
Highlights
-- PL101/2020 - Assays pending for a soil survey with further
surveys planned over copper surface sample anomalies together with
a scheduled Airborne Gravity Gradiometry survey ("AGG") over the
Kuke Prospect
-- Sandfire plans to mobilise a diamond rig to the Kuke Prospect
to drill test a copper soil anomaly coincident with the Kuke
Fault
-- PL100/2020 - Ongoing target generation and a scheduled AGG survey over the licence
-- Sandfire also plans to undertake drilling on this licence in
the coming weeks to test the Lower D'kar/Ngwako Pan contact zone
which is the horizon hosting most of the Kalahari Copperbelt
deposits
Outlook
Outlook for Copper: During the second half of 2022 into 2023 the
copper price has recovered and forecasts for the price of copper
and its by-product metals remain positive in the range of
US$10-US$15,000 per tonne. The outlook for copper supply is quite
pessimistic as most large copper mining projects have been shelved
as a result of political or economic reasons but we anticipate and
from mid '24 onwards this will lead to both smaller but profitable
mines being developed , and junior mining companies with good
copper resources in reliable jurisdictions becoming potential
targets for acquisitions by major mining companies. As a result,
the Company is well positioned with all its projects, to take part
in a potential acquisition boom or alternatively to attract
financing for its own operations which might not otherwise have
been available.
The major mining companies are seeking new projects for
acquisition and all our projects have the fundamentals which may
attract the attention of larger companies as reflected in the fact
that we have already entered into an agreement with Sandfire in
relation to certain of the Botswana Projects and First Quantum in
relation to certain of the Zambian Projects.
We feel that there is a strong possibility that the current
inflationary pressures and higher interest rates may slow down
stock markets but these conditions will be beneficial for the
smaller metal producers who have historically outperformed under
these economic conditions.
The Board feels the Group has assembled an enviable portfolio of
projects and we are pleased that Sandfire has taken and retained a
significant equity position in the Company. We look forward to
advancing all our projects and providing our shareholders with the
prospects of enhanced value flowing into next year.
By Order of the Board
28 April 2023
DIRECTORS' REPORT
The directors present their report on the affairs of African
Pioneer Plc (the "Company") for the year ended 31 December 2022.
The Company was incorporated on 20 July 2012.
PRINCIPAL ACTIVITIES
The principal activity of the Company and its subsidiaries (the
"Group") is the exploration for base metals in Zambia, Namibia and
Botswana.
Investing in small natural resource projects and mineral
exploration projects can be very rewarding, but because of the
issues and uncertainties arising from exploration, resource
estimation, commodity price volatility, politics and the financing
of such projects, there is a significant possibility of such reward
not materialising. As a result of the nature and size of the
Company it will, in the early years particularly, be exposed to a
concentration of risk either by sector or geographically, or
possibly both. These risks are outlined in more detail in the
Strategic Report.
REVIEW OF THE BUSINESS
During the year, the Group made a loss of GBP(670,871) - 2021:
restated profit of GBP273,471.
A review of the current and future development of the Group's
business are included in the Strategic Report.
The Directors do not recommend the payment of a dividend.
SUBSEQUENT EVENTS
Details of subsequent events after the year end are disclosed in
note 18 o the financial statements
DIRECTORS
The names of the Directors who served throughout the period and
subsequent to the year end, except where shown otherwise, are as
follows:
C Bird
R. Samtani
C Cordier
K Thygesen
J Cunningham-Davis
Directors' interests in the ordinary share capital of the
Company at the date of this report are disclosed within the
Directors Remuneration Report
DIRECTOR'S REMUNERATION
The Directors' remuneration is detailed in the Directors'
Remuneration Report on pages 19 to 21
DIRECTORS' AND OFFICERS' INDEMNITY INSURANCE
The Group has purchased Directors' and Officers' liability
insurance which provides cover against liabilities arising against
them in that capacity
USE OF FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
Details of the use of financial instruments and associated risk
management by the Group are included in note 3 to the financial
statements.
SUBSTANTIAL SHAREHOLDINGS
Other than Directors interests which are set out below on a
separate table in this report, the following shareholders held 3%
or more of the issued share capital of the Company at 21 April
2023. These holdings are extracted as they appear in the relevant
custodian account in the Company's share register.
% of Ordinary
Shares in
Registered Shareholder No. of Ordinary Shares issue
The Bank Of New York (Nominees)
Limited * 34,785,714 18.15%
Sandfire Resources Limited 28,418,932 14.82%
HSBC Global Custody Nominee
(UK) Limited * 24,871,784 12.97%
Hargreaves Lansdown (Nominees)
Limited * 15,871,987 8.28%
Mohamad Ali Ahmad 15,000,000 7.82%
Jim Nominees Limited * 7,142,856 3.73%
Vidacos Nominees Limited * 6,715,095 3.50%
132,806,368 69.28%
======================= ==============
*Nominee shareholder; not beneficial owner.
UK STREAMLINED ENERGY AND CARBON REPORTING
The Group's UK energy and carbon information is not disclosed as
the Company qualifies as it consumed less than 40MWh and is a Low
Energy user in the UK.as defined in the Environmental Reporting
Guidelines Including streamlined energy and carbon reporting
guidance March 2019 (Updated Introduction and Chapter 1) and as
such is not required to provide detailed disclosures of energy and
carbon information. The Company has no UK-based subsidiaries and
its overseas subsidiaries, some of which own exploration licences
and conduct exploration activities outside the U.K. are not
required to report U.K. energy consumption in their own right. The
Company was also below this threshold in 2021.
POLITICAL DONATIONS
The Group made no political donations during the year (2021:
none).
STATEMENT AS TO THE DISCLOSURE OF INFORMATION TO
THE AUDITORS AND DIRECTORS' RESPONSIBILITIES STATEMENT
The Directors (being Colin Bird-Chairman, Raju Samtani-Finance
Director, Christian Cordier-Business Development Director, Kjeld
Thygesen -Independent Non-Executive Director and James
Cunningham-Davis Non-Executive Director, who were in office at the
date of approval of this report, confirm that, so far as they are
aware, there is no relevant audit information of which the
Company's auditor is unaware of and that they have taken all
reasonable steps to take themselves aware of any relevant audit
information and to establish that the Company's auditor is aware of
that information.
The Directors are responsible for preparing the financial
statements in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority ("DTR") and with International Financial Reporting
Standards as adopted by the United Kingdom.
The Directors confirm to the best of their knowledge that:
-- the financial statements have been prepared in accordance
with the relevant financial reporting framework and give a true and
fair view of the assets, liabilities, financial position and profit
or loss of the Group and the Company; and
-- the Strategic Report and Directors' Report include a fair
review of the development and performance of the business and the
financial position of the Group and the Company, together with a
description of the principal risks and uncertainties that it faces;
and
-- the annual report and financial statements, taken as a whole,
are fair, balanced, and understandable and provide the information
necessary for shareholders to assess the Group's position,
performance, business model and strategy.
AUDITORS
The auditors, Shipleys LLP have indicated their willingness to
continue in office. A resolution to re-appoint them will be
proposed at the forthcoming Annual General Meeting.
Signed on behalf of the Board:
28 April 2023
Colin Bird Raju Samtani
Executive Chairman Director
DIRECTORS' REMUNERATION REPORT
This Remuneration Report sets out the Group's policy on the
remuneration of Directors, together with details of Directors'
remuneration packages and service contracts for the year ended 31
December 2022.
The Company's policy is to maintain levels of remuneration to
attract, motivate, and retain Directors and Senior Executives of
the highest calibre who can contribute their experience to deliver
industry-leading performance with the Company's operations. The
Company is nonetheless mindful of the need to balance this
objective with the fact that it is pre-revenue.
Since listing on 1 June 2021, the Company's Directors have
largely remunerated through a combination of modest salaries and/or
fees and where relevant, equity positions as founders and as a
result the total salaries and fees payable to directors has been
relatively modest.
As the Company grows, and increasingly makes hires, it will
become necessary to move to a more long-term and sustainable
policy, which continues to align the interests of Directors and
senior staff with those of shareholders while recognising that new
hires will not initially have a significant equity position.
Accordingly, it is likely that compensation packages for
Executive Directors will need to move over time to a level more
consistent with the market. Currently, Directors' remuneration is
not subject to specific performance targets. The Company is
sufficiently small that the Board does not consider that it is
necessary to impose such targets as a matter of principle but
believes that exceptional performance can be rewarded on an ad hoc
basis.
As outlined in last year's Directors Remuneration Report the
Board proposed and shareholders approved at the 2022 AGM a share
option scheme which is to incentivise both Executive and
non-Executive Directors as well individuals holding positions of
responsibility in the Company ("Share Option Scheme"). On 24
January 2023 the Company announced that pursuant to the Executive
Share Option Scheme approved at the Company's Annual General
Meeting ("AGM") held on 23 August 2022 16,850,000 options over
Ordinary Shares ("Options") were awarded, 6,600,000 of the Options
were awarded to directors of the Company, as detailed further in
Note 18 and the balance of 10,250,000 Options to other eligible
participants. The Company had not previously issued any
Options.
The 2022 AGM also approved the Company establishing new
incentive schemes to more closely align the interest of directors,
officers, employees and consultants with those of shareholders by
providing for the payment of short-term, annual and transaction
incentive awards in cash or Company shares (the "Proposed Incentive
Schemes"). Awards under the Proposed Incentive Schemes are not
intended to replace the Share Option Scheme arrangements and the
Proposed Incentive Schemes, shall continue in place until the Board
of the Company have put an alternative incentive scheme to the
Company's shareholders which the Company's shareholders have
approved.
The Board considers the remuneration of Directors and senior
staff and their employment terms and makes recommendations to the
Board of Directors on the overall remuneration packages. No
Director takes part in any decision directly affecting their own
remuneration.
There has been no correspondence to date from shareholders
relating to Directors' remuneration matters and therefore no such
matters have been considered by the Board in formulating the
Company's remuneration policy.
In determining Executive Director remuneration policy and
practices, the Board aims to address the following factors:
-- Clarity - remuneration arrangements should be transparent and
promote effective engagement with shareholders and the
workforce;
-- Simplicity - remuneration structures should avoid complexity
and their rationale and operation should be easy to understand;Risk
- remuneration arrangements should ensure reputational and other
risks from excessive rewards, and risks that can arise from
target-based incentive plans, are identified and mitigated;
-- Predictability - the range of possible values of rewards to
individual directors and any other limits or discretions are
identified and explained at the time of approving the policy;
-- Proportionality - the clarity of the link between individual
awards, the delivery of strategy and the long-term performance of
the company should be clear; and
-- Alignment to culture - incentive schemes, when implemented
will drive behaviours consistent with company purpose, values and
strategy.
Directors' remuneration
Remuneration of the Directors for the years ended 31 December
2022 and 2021 was as follows:
2022 2022 2022 2021
Directors' Consulting Total Total
Fees Fees Emoluments Emoluments
GBP GBP GBP GBP
C. Bird 18,000 42,000 60,000 35,000
R. Samtani 18,000 32,004 50,004 29,169
C Cordier 18,000 12,000 30,000 16,500
K Thygesen 18,000 - 18,000 10,500
James Cunningham-Davis 14,400 - 14,400 9,300
Total 86,400 86,004 172,004 100,469
------------- ------------- ------------ ------------
Each of the Directors entered into service agreements at the
time of the Company's admission to the market on 1 June 2021.
Details of Directors' Letters of Appointment and Service Agreements
as disclosed in Note 16 of these Financial Statements.
There were no pensions or other similar arrangements in place
with any of the Directors during the years ended 31 December 2022
or 2021.
Payments to past directors
The Company did not pay any compensation to past Directors in
2022 and 2021.
DIRECTORS' INTERESTS
The beneficial interest of the directors, their spouses and
minor children in the share capital of the Company are as
follows:
Ordinary Shares of No Par Value
31 December 2022 31 December 2021
C Bird* 21,061,728 21,061,728
R Samtani 16,061,728 16,061,728
J Cunningham-Davis*** - -
C Cordier** 15,000,000 15,000,000
K Thygesen 200,000 200,000
* Colin Bird's shareholding includes 5,000,000 ordinary shares
held by Campden Park Trading, a company owned and controlled by
Colin Bird , the Company's Chairman
** Christian Cordier's shareholding includes 4,000,000 ordinary
shares held by Tonehill Pty Ltd and 3,000,000 ordinary shares held
by Coreks Super Pty Ltd both of which companies are owned and
controlled by Christian Cordier. It also includes
8,000,000 ordinary shares held by Breamline Pty Ltd of which
Christian Cordier is a director and which is a trustee company for
Breamline Ministries
*** 230,000 warrants are held by Cavendish Trust of which James
Cunningham -Davis is a director and a controlling majority
shareholder.
There have been no further changes in directors' interests since
the year end other than the issue of Options detailed below which
were announced on 23 January 2023.
Approved by the Board on 28 April 2023
CORPORATE GOVERNANCE REPORT
Corporate Governance
The Board guides and monitors the business and affairs of the
Company on behalf of the Shareholders to whom it is accountable and
is responsible for corporate governance matters. While certain key
matters are reserved for the Board, it has delegated
responsibilities for the day-to-day operational, corporate,
financial and administrative activities to the Business Development
Director, the Executive Chairman and the Finance Director.
In assessing the composition of the Board, the Directors have
had regard to the following principles:
-- the role of the Executive Chairman and the other directors
should not be exercised by the same person;
-- the Board should include at least one independent
non-executive director, increasing where additional expertise is
considered desirable in certain areas, or to ensure a smooth
transition between outgoing and incoming non-executive directors;
and
-- the Board should comprise of directors with an appropriate
range of qualifications and expertise.
The Company believes it complies with each of these
principles.
Both James Cunningham-Davis and Kjeld Thygesen are the
Non-Executive Directors of the Company. James Cunningham-Davis is
one of the directors of Cavendish Secretaries Limited, a subsidiary
of Cavendish Trust Company Limited, which provides secretarial
services to the Company in the Isle of Man and is therefore for
these purposes not considered independent.
Kjeld Thygesen has a holding of Ordinary Shares representing
0.10 per cent. of the issued share capital and he is considered
independent given this holding is de minimis.
Directors appointed by the Board are subject to election by
shareholders at the Annual General Meeting of the Company following
their appointment and thereafter are subject to re-election in
accordance with the Company's Articles of Association.
The QCA Corporate Governance Code, as published by the Quoted
Companies Alliance, is tailored for small and mid-size quoted
companies in the United Kingdom. The Company will, to the extent
practicable for a company of its size and nature, follow the QCA
Corporate Governance Code. The Directors are aware that there are
currently certain provisions of the QCA Corporate Governance Code
that the Company is not in compliance with, given the size and
early stage nature of the Company. These include, inter alia:
-- The Company does not currently have a remuneration,
nomination or risk committee. The Board as a whole will review
remuneration, nomination and risk matters, on the basis of adopted
terms of reference governing the matters to be reviewed and the
frequency with which such matters are considered. The Board as a
whole will also take responsibility for the appointment of auditors
and payment of their audit fee, monitor and review the integrity of
the Company's financial statements and take responsibility for any
formal announcements on the Company's financial performance.
-- Unless further independent non-executive directors are
appointed, the Board will not comply with the provision of the QCA
Corporate Governance Code that at least to members of the Board,
excluding the Chairman, should comprise non-executive directors
determined by the Board to be independent.
-- The Executive Chairman of the Company is an executive
director rather than an independent non-executive director as
suggested by the QCA corporate governance code
Share Dealing Code
The Company has adopted, with effect from Admission, a share
dealing policy regulating trading and confidentiality of inside
information for the Directors and other persons discharging
managerial responsibilities (and their persons closely associated)
which contains provisions appropriate for a company whose shares
are admitted to trading on the Official List (particularly relating
to dealing during closed periods which will be in line with the
Market Abuse Regulation). The Company will take all reasonable
steps to ensure compliance by the Directors and any relevant
employees with the terms of that share dealing policy.
Audit Committee
The Audit Committee is chaired by James Cunningham-Davis and its
other member is Christian Cordier. The Audit Committee meets at
least twice a year, or more frequently if required. The Audit
Committee is responsible, amongst other things, for making
recommendations to the Board on the appointment of auditors and the
audit fee, monitoring and reviewing the integrity of the Company's
financial statements and any formal announcements on the Company's
financial performance as well as reports from the Company's
auditors on those financial statements.
In addition, the Audit Committee considers and reviews the
Company's internal financial control and risk management systems to
assist the Board in fulfilling its responsibilities relating to the
effectiveness of those systems, including an evaluation of the
capabilities of such systems in light of the expected requirements
for any specific acquisition target.
Meetings of the Directors
The number of meetings of the board of directors of the Company
and its committees held during the year ended 31 December 2022 and
the number of meetings attended by each director is tabled below.
The audit committee was formed on 26 May 2021 prior to the
Company's listing on the London Stock Exchange
2022
Meetings Meetings attended
Board Audit Board Audit
------ ------ --------- ---------
C. Bird 2 - 2 -
R. Samtani 2 - 2 -
J. Cunningham-Davis 2 2 2 2
K Thygesen 2 - 2 -
C. Cordier 2 2 2 2
Diversity Policy
The Board operates a policy whereby Directors and other
individuals considered for employment and professional services
across the Group are selected on the basis of their experience,
professional qualifications and ability and a such the Company does
not discriminate on aspects such as age, gender or educational and
professional background.
The Company is a small exploration company and the Company's
only employees comprising of the 5 Board Directors who have been in
office since the Listing on 1 June 2021 and were the Board members
on the basis of whose experience and expertise investors invested
in the Company at the time of the Listing. The Company has at the
date of these accounts not expanded or changes the composition of
its Board and accordingly has not met the following targets on
board diversity
(i) at least 40% of the individuals on its board of directors
are women; and
(ii) at least one of the following senior positions on its board
of directors is held by a woman (A) the chair; (B) the chief
executive; (C) the senior independent director; or (D) the chief
financial officer.
The Company has met the target that at least one individual on
its board of directors s from a minority ethnic background
The diversity composition of the Board is shown in the table
below:
Percentage of Number of Number in Percentage of
Number of board the board senior executive executive
members positions on management management
the board
(CEO, CFO, SID
and Chair)
Men 5 100 % 3 3 100%
================ =============== =============== ===============
Women 0 Nil - - Nil
================ =============== =============== ===============
Ethnic Background of Board members Number Percentage Number of Number in Percentage
of of the senior executive of
board board positions management executive
members on the management
board
(CEO,
CFO, SID
and
Chair)
White British or other White
(including minority-white
groups) 4 80% 2 2 66%
======== =========== ========== =========== ===========
Mixed/Multiple Ethnic Groups
======== =========== ========== =========== ===========
Asian/Asian British 1 20% 1 1 33%
======== =========== ========== =========== ===========
Black/African/Caribbean/Black
British
======== =========== ========== =========== ===========
Other ethnic group, including
Arab
======== =========== ========== =========== ===========
Not specified/ prefer not to
say
======== =========== ==========
Internal control
The Board is responsible for establishing and maintaining the
Group's system of internal control. Internal control systems manage
rather than eliminate the risks to which the Group is exposed and
such systems, by their nature, can provide reasonable but not
absolute assurance against misstatement or loss.
There is a continuous process for identifying, evaluating and
managing the significant risks faced by the Group. The key
procedures which the Directors have established with a view to
providing effective internal control, are as follows:
-- Identification and control of business risks The Board
identifies the major business risks faced by the Group and
determines the appropriate course of action to manage those
risks.
-- Budgets and business plans Each year the Board approves the
business plan and annual budget. Performance is monitored and
relevant action taken throughout the year through the regular
reporting to the Board of changes to the business forecasts.
-- Investment appraisal Capital expenditure is controlled by
budgetary process and authorisation levels. For expenditure beyond
specified levels, detailed written proposals must be submitted to
the Board. Appropriate due diligence work is carried out if a
business or asset is to be acquired.
Environmental, Social and Governance (ESG) Policy
African Pioneer plc practises responsible exploration as
reflected in our ESG policy and our activities. By doing so we
reduce project risk, avoid adverse environmental and social
impacts, optimising benefits for all stakeholders while adding
value to our projects.
Our business associates, consultants and contractors perform
much of our primary activities at our projects and therefore we
require that all representatives and contractors working on our
behalf or for our subsidiaries accept and adhere to the principles
set out in this policy. We encourage input from those with local
knowledge and we review this policy on a regular basis.
Our ESG policy is guided by the Prospectors & Developers
Association of Canada's (PDAC) Framework for Responsible
Exploration (known as e3 Plus) which encourages mineral exploration
companies to complement and improve social, environmental and
health and safety performance across all exploration activities
around the world.
Adopting Responsible Governance and Management: African Pioneer
is committed to environmentally and socially responsible mineral
exploration and has developed and implemented policies and
procedures for corporate governance and ethics. We ensure that all
staff and key associates are familiar with these and have the
appropriate level of knowledge of these policies and
procedures.
The Company employs persons and engages contractors with the
required experience and qualifications relevant to their specific
tasks and, where necessary, seeks the advice of specialists to
improve understanding and management of social, environmental,
human rights and security, and health and safety.
African Pioneer's Corporate Governance Statement can be viewed
on our website and the Company has an Anti-Bribery and Corruption
policy and an Anti-Slavery policy.
-- Applying Ethical Business Practices: As well as our
shareholders and staff, our stakeholders include local communities
and local leadership, government and regulatory authorities,
suppliers, contactors and consultants, our local business partners
and other interested parties. Our corporate culture and policies
require honesty, integrity, transparency and accountability in all
aspects of our work and when interacting with all stakeholders.
The Company takes all necessary steps to ensure that activities
in the field minimise or mitigate any adverse impacts on both the
environment and on local communities.
-- Respecting Human Rights: The exploration activities of
African Pioneer are carried out in line with applicable laws on
human rights and the Company does not engage in activities that
have adverse human rights impacts.
-- Commitment to Project Due Diligence and Risk Assessment: We
make sure we are informed of the laws, regulations, treaties and
standards that are applicable with respect to our activities. We
ensure that relevant parties are informed and prepared before going
into the field in order to minimise the risk of miscommunication,
unnecessary costs and conflict, and to understand the potential for
creating opportunities with local communities where possible.
-- Engaging Host Communities and Other Affected and Interested
Parties: African Pioneer is committed to engaging positively with
local communities, regulatory authorities, suppliers and other
stakeholders in its project locations, and encourages feedback
through this engagement. Through this process, the Company develops
and fosters the relationships on which our business relies for
success.
-- Protecting the Environment: We are committed to ensuring that
environmental standards are met or exceeded in the course of our
exploration activities. Applicable laws and local guidelines in all
project jurisdictions are followed diligently and exploration
programmes are only carried out once relevant permits and approvals
have been secured from the appropriate regulatory bodies.
African Pioneer is committed to good practices in rehabilitation
and repair during its mineral exploration activities and, where
possible, choose less impactful exploration methods to limit
disturbance.
-- Safeguarding the Health and Safety of Workers and the Local
Population: Company activities are carried out in accordance with
good practice and applicable laws related to Health and Safety.
Environment Health, safety and community statement
The Group is committed to providing a safe working environment
for all its employees and to responsibly manage all of the
environmental interactions of its business. Its objective is to
perform and achieve at a level notably in excess of the regulatory
minima required by the host countries in which it does
business.
The following specific principles are adhered to by the
Group:
Health & Safety
-- Provision of health and safety training to all employees;
-- All necessary measures are taken to minimise workplace
injuries, and
-- Establishment of management and advisory programmes for the
prevention of transmissible diseases.
Environment
The Group prides itself on being a skilled and responsible
operator. It functions with the clear mandate of being in full
compliance with corporate standards, applicable environmental laws,
regulations and permit requirements. It has an internal monitoring
programme in place that plays a critical role in continuously
improving its environmental performance.
The Group strives to minimise its environmental effects wherever
and to:
-- Comply with applicable laws, regulations and commitments wherever it operates;
-- Ensure it has the necessary resources, procedures, training
programmes and responsibilities in place to achieve its
environmental objectives;
-- Strive to protect air and water quality, minimise consumption
of water and energy, and protect natural habitats and
biodiversity;
-- Promote an ongoing environmental dialogue with its
stakeholders in the communities where it conducts business;
-- Collaborate with stakeholders to define environmental
priorities and to protect the environment, and
-- Consider the requirement for environmental protection in all
aspects of exploration and development.
Communities
As well as recognising the need to protect the natural
environment the Group will follow Best Practices in:
-- its interactions with local communities,
-- respecting customs and cultural practices, and -- minimising
intrusion upon lifestyles and traditions.
The Group will not violate human rights and will, wherever
possible, favour employment for local people when it recruits. It
will strive to be recognised as a socially aware and responsible
business
Task Force on Climate-related Financial Disclosures (TCFD)
The Company has not included climate-related financial
disclosures consistent with any of the TCFD Recommendations and
Recommended Disclosures, as required by Listing Rule 14.3.27,
neither in this annual financial report or any other document as it
has not yet established the metrics and obtained the data to do
this. Set out below is a summary of the Company's activities and
how the Company proposes to align with the TCFD recommendations.
The Company will provide an update of its alignment with the TCFD
recommendations in next year's Annual Report.
The Company's business strategy is to explore for base metals
focusing on Southern Africa which are materials used to produce
diverse products used in modern living in a safe and sustainable
environment for all its stakeholders with a focus on copper
projects. As an organisation, we recognise the growing importance
of understanding the impact of climate change on the environment in
which we operate and its potential impact on the business.
TCFD was established in 2015 to improve and increase reporting
of climate-related financial information and to provide information
to investors about the actions companies are taking to mitigate the
risks of climate change, as well as to provide increased clarity on
the way in which they are governed.
The Company's exploration activities are "asset" light as the
Company does not own its drilling and exploration equipment and
instead uses contractors and it is a standard operating procedure
for exploration activities to be conducted in accordance with
applicable environmental regulations. The effect of this is that
the Company's demand for and use of carbon fuels is very low though
its contractors will use carbon fuels. An opportunity arising for
the Company's from climate change is that copper is projected to
increase in response to the global green energy transition in
particular for electric vehicles, charging stations and the
generation and distribution of renewable energy.
The Company is planning to adopt the TCFD framework and
recommendations to the extent that it is appropriate given the size
of the company and its activities. The framework is useful as a
guide to understand how climate change could impact a broad range
of business drivers and will provide a structured approach for the
Group, to work towards embedding climate into our decision-making
and will enable us to learn from and apply best practice on
reporting and disclosures.
We see this as a means to increase the quality and transparency
in our climate related disclosures whilst taking the first steps on
the roadmap of TCFD reporting. We aim to ensure our stakeholders
will have a better understanding of the Company's operational and
business resilience to climate change and how we will incorporate
the consideration of climate-related risks and opportunities in our
business model. The table below provides a brief statement on our
current thought process to understand and begin aligning with the
TCFD recommendations.
Governance: The Group's governance relating to climate-related
risks and opportunities is the responsibility of the Board.
Strategy: The actual and potential impacts of climate-related
risks and opportunities will have effects on the business policies,
strategy and financial planning of APP.
Risk Management: The financial director is responsible for APP's
risk assessment and identifying, assessing, and managing climate
related risks is part of that function.
Metrics & Targets: The formulation of metrics and targets
used to assess and manage relevant climate related risks and
opportunities will be considered.
STRATEGIC REPORT
The Directors present their strategic report on the group for
the year ended 31 December 2022.
PRINCIPAL ACTIVITY
African Pioneer Plc ("the Company") is a public limited company
which is listed on the main market of the London Stock Exchange and
incorporated and domiciled in the Isle of Man. The Company's
registered address is 34 North Quay, Douglas, Isle of Man, IM1
4LB.
The Company is the parent company of African Pioneer Zambia Ltd,
Resource Capital Partners Pty Ltd and Zamcu Exploration Pty Ltd,
which has an 85% equity holding in Manmar Investments One Hundred
and Twenty Nine (Pty) Ltd and Manmar Investments One Hundred and
Thirty Six (Pty) Ltd. (see note 10 for further details).
The principal activity of the Company and its subsidiaries (the
"Group") is the exploration for base metals in Zambia, Namibia and
Botswana.
GOING CONCERN
As disclosed in Note 2 The Group made a loss from all operations
for the year ended 31 December 2022 after tax of GBP(671,000)
(2021: restated profit of GBP273,471). An operating loss is
expected in the year subsequent to the date of these accounts and
as a result the Company will need to raise funding to provide
additional working capital to finance its ongoing activities. The
management team has successfully raised funding for exploration
projects in the past, but there is no guarantee that adequate funds
will be available when needed in the future.
Based on its current reserves and the Board's assessment that
the Company will be able to raise additional funds, as and when
required, to meet its working capital and capital expenditure
requirements, the Board have concluded that they have a reasonable
expectation that the Group can continue in operational existence
for the foreseeable future. For these reasons the financial
statements have been prepared on the going concern basis, which
contemplates continuity of normal business activities and the
realisation of assets and discharge of liabilities in the normal
course of business.
KEY PERFORMANCE INDICATORS
The key performance indicators in assessing the completion of
this activity are monitored on a regular basis:
-- Progress with exploration, monitoring licence commitments and
environmental compliance; and
-- Cash management - ensuring that the Company is well funded
and has adequate cash to meet to meet its obligations as they fall
due.
REVIEW OF THE BUSINESS
Details of the Company's strategy, results and prospects are set
out in the Chairman's Statement and in the Operations Report on
pages 3 to 15.
Financial highlights:
-- GBP671k consolidated loss after tax (2021: GBP273k - profit)
-- Approximately GBP72k cash at bank at the year-end (2021: GBP1.19m).
-- The basic and diluted losses per share are summarised in the table below
Profit/(Loss) 2021
per share (pence) 2022 restated
Note
Basic 6 (0.35)p 0.24p
Note
Diluted 6 (0.29)p 0.20p
-- The net asset value of the Group at as at 31 December 2022
was GBP5.4M (31 December 2021 restated GBP6.1m)
INVESTMENTS HELD BY THE COMPANY FOR RESALE
At year-end, the Group held investments in five companies
classified as available-for-sale investments and valued at
GBP395,750 and had a cash balance of GBP71,674. The Group is able
to raise additional cash at short notice by selling its investments
which are liquid. It is the Group's intention not to purchase any
new investments and to hold its residual portfolio as realisable
investments as a source of liquidity to cover explorations costs
and general overheads of the Group.
PORTFOLIO HOLDING AT 31 December 2022
Number Cost Valuation Valuation
31/12/22 31/12/22 31/12/22 31/12/21
Jubilee Metals Group Plc 217,802 8,266 22,107 35,393
Galileo Resources Plc 2,500,000 50,000 32,500 24,500
Sandfire Resources Ltd 107,272 302,960 329,325 379,489
South 32 Limited - - - 30,044
Xtract Resources Plc 606,060 20,217 11,818 33,030
-------- --------- --------
TOTAL FOR AFRICAN PIONEER
PLC 381,443 395,750 502,456
-------- --------- --------
PRINCIPAL RISKS AND UNCERTAINTIES
This business carries a high level of risk and uncertainty,
although the potential rewards can be outstanding. The Directors
have identified the following principal risks in regards to the
Group's future. The relative importance of risks faced by the Group
can, and is likely to, change as the Group executes its strategy
and as the external business environment evolves the strategy as
may be required based on developments and exploration results. Key
elements of this process are the Group's monthly reporting and
Board meetings.
Strategic risk
The Group's strategy may not deliver the results expected by
shareholders. The Directors regularly monitor the appropriateness
of the strategy, taking into account both internal and external
factors, together with progress in and modify
Exploration risk
Exploration at the Namibia, Zambia and Botswana Projects may not
result in success.
Whilst the Directors endeavour to apply what they consider to be
the latest technology to assess projects, the business of
exploration for and identification of minerals and metals, is
speculative and involves a high degree of risk. The mineral and
metal potential of the Group's initial projects, Namibia and
Zambia, may not contain economically recoverable volumes of
minerals, base metals, or precious metals of sufficient quality
or quantity. To mitigate this risk, the Group has acquired the
rights to carry out exploration and earn an interest in certain
licences in the specific areas.
Even if there are economically recoverable deposits, delays in
the construction and commissioning of mining projects or other
technical difficulties may make the deposits difficult to exploit.
The exploration and development of any project may be disrupted,
damaged or delayed by a variety of risks and hazards which are
beyond the control of the Group. These include (without limitation)
geological, geotechnical and seismic factors, environmental
hazards, technical failures, adverse weather conditions, acts of
God and government regulations or delays.
Exploration is also subject to general industrial operating
risks, such as equipment failure, explosions, fires and industrial
accidents, which may result in potential delays or liabilities,
loss of life, injury, environmental damage, damage to or
destruction of property and regulatory investigations. The Group
may also be liable for the mining activities of previous miners and
previous exploration works. Although the Group intends, itself or
through its operators, to maintain insurance in accordance with
industry practice, no assurance can be given that the Group or the
operator of an exploration project will be able to obtain insurance
coverage at reasonable rates (or at all), or that any coverage it
obtains will be adequate and available to cover any such claims.
The Group may elect not to become insured because of high premium
costs or may incur a liability to third parties (in excess of any
insurance cover) arising from pollution or other damage or
injury.
Environmental and other regulatory risks
In relation to the Group's existing projects the environmental
impact to date is limited to activities associated with
exploration. The ultimate development of any project into a mining
operation will inevitably impact considerably on the local
landscape and communities. These projects sit in an area of
considerable natural beauty and therefore there is likely to be
opposition to mining by some parties. This may impact on the cost
and/or Group's ability to sell or move these projects into
production.
While the Group believes that its operations and future projects
are currently, and will be, in substantial compliance with all
relevant material environmental and health and safety laws and
regulations, including relevant international standards, there can
be no assurance that new laws and regulations, or amendments to, or
stringent enforcement of, existing laws and regulations will not be
introduced.
Nevertheless, the Group will continue to vigorously apply
international standards to the design and execution of any and all
of its activities, including engagement and consultation with local
communities, and non-governmental and Governmental organisations to
ensure any impacts of current and future activities are minimised
and appropriately managed. The Group has organisations to ensure
any impacts of current and future activities are minimised and
appropriately managed. The Group has established a comprehensive
suite of health, safety, environmental and community policies which
will underpin all future activities.
Financing
The successful exploration or exploitation of natural resources
on any project will require significant capital investment. The
only sources of financing currently available to the Group are
through the issue of additional equity capital in the
Company or through bringing in partners to fund exploration and
development costs. The Group's ability to raise further funds will
depend on the success of their investment strategy and conditions
in financial and commodity markets. The
Group may not be successful in procuring the requisite funds on
terms which are acceptable to it (or at all) and, if such funding
is unavailable, the Group may be required to reduce the scope of
its investments or anticipated expansion.
Political, economic and regulatory regime
The licences and operations of the Group are in jurisdictions
outside the United Kingdom and accordingly there will be a number
of risks which the Group will be unable to control. Whilst the
Group will make every effort to ensure it has robust commercial
agreements covering its activities, there is a risk that the
Group's activities will be adversely affected by economic and
political factors such as the imposition of additional taxes and
charges, cancellation or suspension of licences and changes to the
laws governing mineral exploration and operations.
The Group's activities will be dependent upon the grant of
appropriate licences, concessions, leases, permits, and regulatory
consents that may be withdrawn or made subject to limitations.
There can be no assurance that they will be granted or renewed or
if so, on what terms. There is also the possibility that the terms
of any licence may be changed other than as represented or
expected.
The current focus of the Group's activities, offer stable
political frameworks and actively support foreign investment. The
countries have well-developed exploration and mining code and
proactive support for foreign companies. Through a programme of
proactive engagement with each Government at all levels the Group
is able to partially mitigate these risks by establishing
professional working relationships.
Dependence on key personnel
The Group is dependent upon its executive management team and
various technical consultants. Whilst it has entered into
contractual agreements with the aim of securing the services of
these personnel, the retention of their services cannot be
guaranteed. The development and success of the Group depends on its
ability to recruit and retain high quality and experienced staff.
The loss of the service of key personnel or the inability to
attract additional qualified personnel as the Group grows could
have an adverse effect on future business and financial conditions.
Nevertheless, through programmes of incentivising staff,
appropriate succession planning, and good management these risks
can be largely mitigated.
Uninsured risk
The Group, as a participant in exploration and development
programmes, may become subject to liability for hazards that cannot
be insured against or third-party claims that exceed the insurance
cover. The Group may also be disrupted by a variety of risks and
hazards that are beyond its control, including geological,
geotechnical and seismic factors, environmental hazards, industrial
accidents, occupation and health hazards and weather conditions or
other acts of God.
Other business risks
In addition to the current principal risks identified above and
those disclosed in note 3 to the financial statements, the Group's
business is subject to risks relating to the financial markets and
commodity markets. The buoyancy of both the aforementioned markets
can affect the ability of the Group to raise funds for exploration.
The Group has identified certain risks pertinent to its business
including:
Strategic and Economic :
-- Business environment changes
-- Limited diversification
Operational :
-- Difficulty in obtaining / maintaining / renewing Licences /
approvals
Commercial :
-- Failure to maximise value from its Namibia/Zambia/Botswana
projects
-- Loss of interest in key assets
-- Regulatory compliance and legal
Human Resources and Management :
-- Failure to recruit and retain key personnel
-- Human error or deliberate negative action
-- Inadequate management processes
Financial :
-- Restrictions in capital markets impacting available financial
resources
-- Cost escalation and budget overruns
-- Fraud and corruption
The Directors regularly monitor such risks, using information
obtained or developed from external and internal sources, and will
take actions as appropriate to mitigate these. Effective risk
mitigation may be critical to the Group in achieving its strategic
objectives and protecting its assets, personnel and reputation. The
Group assesses its risk on an ongoing basis to ensure it identifies
key business risks and takes measures to mitigate these. Other
steps include regular Board review of the business, monthly
management reporting, financial operating procedures and
antibribery management systems. The Group reviews its business
risks and management systems on a regular basis
PROMOTION OF THE COMPANY FOR THE BENEFIT OF THE MEMBERS AS A
WHOLE
The Director's believe they have acted in the way most likely to
promote the success of the Company for the benefit of its members
as detailed below.
- Consider the likely consequences of any decision in the long term
- Act fairly between the members of the Company,
- Maintain a reputation for high standards of business conduct,
- Consider the interests of the Company's employees,
- Foster the Company's relationships with suppliers, customers, and others, and
- Consider the impact of the Company's operations on the community and the environment.
Our Board of Directors remain aware of their responsibilities
both within and outside of the Group. Within the limitations of a
Group with so few employees we endeavour to follow these
principles, and examples of the application of the s172 are
summarised and demonstrated below.
The Group operates as a mining exploration and development
business which is speculative in nature and at times may be
dependent upon fund-raising for its continued operation. The nature
of the business is well understood by the Company's members,
employees and suppliers, and the Directors are transparent about
the cash position and funding requirements.
The Company is investing time in developing and fostering its
relationships with its key suppliers.
As a mining exploration company with future operations based in
Scandinavia, the Board intends to take seriously its ethical
responsibilities to the communities and environment in which it
works.
The interests of future employees and consultants are a primary
consideration for the Board, and we have introduced an inclusive
share-option programme allowing them to share in the future success
of the company. Personal development opportunities are encouraged
and supported.
OUTLOOK
Outlook for Copper: During the second half of 2022 into 2023 the
copper price has recovered and forecasts for the price of copper
and its by-product metals remain positive in the range of
US$10-US$15,000 per tonne. The outlook for copper supply is quite
pessimistic as most large copper mining projects have been shelved
as a result of political or economic reasons and from mid '24
onwards we anticipate this will lead to both smaller but profitable
mines being developed ,and junior mining companies with good copper
resources in reliable jurisdictions becoming potential targets for
acquisitions by major mining companies. As a result, the Company is
well positioned with all its projects, to take part in a potential
acquisition boom or alternatively to attract financing for its own
operations which might not otherwise have been available.
The major mining companies are seeking new projects for
acquisition and all our projects have the fundamentals which may
attract the attention of larger companies as reflected in the fact
that we have already entered into an agreement with Sandfire in
relation to certain of the Botswana Projects and First Quantum in
relation to certain of the Zambian Projects.
We feel that there is a strong possibility that the current
inflationary pressures and higher interest rates may slow down
stock markets but these conditions will be beneficial for the
smaller metal producers who have historically outperformed under
these economic conditions.
The Board feels the Group has assembled an enviable portfolio of
projects and we are pleased that Sandfire has taken and retained a
significant equity position in the Company. We look forward to
advancing all our projects and providing our shareholders with the
prospects of enhanced value flowing into next year.
STATEMENT AS TO THE DISCLOSURE OF INFORMATION TO THE
AUDITORS
The directors are responsible for preparing the Report of the
Directors and the financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under the law the directors
have prepared the financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union. Under company law the directors must not
approve the financial statements unless they are satisfied that the
financial statements give a true and fair view of the state of
affairs and profit or loss of the Company for that period. In
preparing these financial statements, the directors are required
to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business;
-- state whether applicable IFRS's have been followed, subject
to any material departures disclosed and explained in the financial
statements.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006 and
Article 4 of the IAS Regulation. They are also responsible for
safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
The directors confirm that:
-- so far as each director is aware, there is no relevant audit
information of which the Company's auditor is unaware; and
-- the directors have taken all the steps that they ought to
have taken as directors in order to make themselves aware of any
relevant audit information and establish that the auditors are
aware of that information.
Legislation in the Isle of Man governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Signed on behalf of the Board:
28 April 2023
Colin Bird
Executive Chairman
Independent Auditor's Report
Independent Auditor's Report TO THE MEMBERS OF AFRICAN PIONEER
PLC FOR THE YEARED 31 DECEMBER 2022
Opinion
We have audited the financial statements of African Pioneer Plc
(the 'parent company') and its subsidiaries (the 'group') for the
year ended 31 December 2022 which comprise the consolidated
statement of comprehensive income, the consolidated statement of
changes in equity, the company statement of changes in equity, the
consolidated statement of financial position, the company statement
of financial position, the consolidated statement of cash flows,
the company statement of cash flows and the related notes 1 to 18,
including a summary of significant accounting policies. The
financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the EU.
In our opinion, the financial statements:
-- give a true and fair view of the state of the group's and of
the parent company's affairs as at 31 December 2022 and of the
group's result for the year then ended;
-- have been properly prepared in accordance with IFRSs.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the company
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Material Uncertainty Relating to Going Concern
We draw attention to note 2 in the financial statements, which
indicates that the Company and Group made a loss of (GBP658,505)
and (GBP670,871) respectively, and an operating loss is expected in
the year subsequent to the year of these financial statements. As a
result the Company and Group will need to raise funding to provide
additional working capital to finance its ongoing activities. As
stated in note 2, these conditions, along with other matters set
forth in note 2, indicate that material uncertainty exists that may
cast significant doubt on the Company and Group's ability to
continue as a going concern.
Our audit opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Key audit matters Description of the How the scope of
risk our audit addressed
the risk
Revenue recognition There is a risk of Our work examined
fraud in revenue recognition sources of income
giving rise to material and no evidence of
misstatements in the fraud or other understatement
accounts. in revenue was identified.
------------------------------- -------------------------------
Risk that management Risk that inappropriate We examined journals
is able to override accounting journals posted around the
controls may be posted giving year end, specifically
rise to material misstatement focusing on areas,
in the accounts. which are more easily
manipulated.
We identified no evidence
of management override
in respect of inappropriate
manual journals recorded
in any section of
the financial statements.
------------------------------- -------------------------------
IFRS6 Mining and Exploration Risk that mining exploration Our work examined
rights and licensing costs licenses and other
are inappropriately capitalised expenditure
capitalised with respect to ensure it fell
to the criteria set within the capitalisation
out in IFRS 6. criteria under IFRS6
and no evidence of
impairment was identified.
------------------------------- -------------------------------
Public Limited Company By virtue of the Company's The listing regulations
listing status listing status and were reviewed and
its public profile, all filings required
the Company has enhanced of the Company were
regulatory supervision seen to have been
and therefore any correctly made on
non-compliance with time. No instance
such regulations could of non-compliance
affect the entities was identified.
ability to trade and
therefore its going
concern status
------------------------------- -------------------------------
Overseas group entities Risk that as the group The finance function
has overseas entities and controls are all
that the accounting centralized from the
records may not be UK, no evidence of
easily obtainable. issues with overseas
entities identified.
------------------------------- -------------------------------
Our application of materiality
In planning and performing our audit we applied the concept of
materiality. An item is considered material if it could reasonably
be expected to change the economic decisions of a user of the
financial statements. We used the concept of materiality to both
focus our testing and evaluate the impact of misstatements
identified.
Based on our professional judgement, we determined overall
materiality for the Group's financial statements as a whole to be
GBP143,171. In determining this, we considered a range of
benchmarks with specific focus on the net assets at the balance
sheet date. This materiality level represents 2.7% of net
assets.
Based on our professional judgement, we determined overall
materiality for the Parent Company's financial statements as a
whole to be GBP143,171. In determining this, we considered a range
of benchmarks with specific focus on the net assets at the balance
sheet date. This materiality level represents 3.4% of net
assets.
We report to the Audit Committee all identified unadjusted
errors in excess of GBP7,159. Errors below that threshold would
also be reported if, in our opinion as auditor, disclosure was
required on qualitative grounds.
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the
Company and its environment, including controls, and assessing the
risks of material misstatement.
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor's report thereon. The directors are responsible for the
other information. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon. In connection with our audit of the
financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required
to determine whether there is a material misstatement in the
financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the directors' report for the
financial year for which the financial statements are prepared is
consistent with the financial statements; and
-- the directors' report has been prepared in accordance with applicable legal requirements.
Matters on which we report by exception
In the light of the knowledge and understanding of the company
and its environment obtained in the course of the audit, we have
not identified material misstatements in the directors' report. We
have nothing to report in respect of the following matters if, in
our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements are not in agreement with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit; or
-- the directors were not entitled to prepare the financial
statements in accordance with the small companies regime and take
advantage of the small companies' exemptions in preparing the
directors' report and from the requirement to prepare a strategic
report.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement set out on page 11, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error. In preparing the financial
statements, the directors are responsible for assessing the
company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
We identify and assess the risks of material misstatement
contained within the financial statements, whether due to fraud or
error, and then design and perform audit procedures responsive to
those risks, including obtaining audit evidence that is sufficient
and appropriate to provide a basis for our opinion.
Identifying and assessing potential risks related to
irregularities
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and non-compliance with
laws and regulations, we considered the following:
-- the nature of the industry and sector, control environment and business performance;
-- results of our enquiries of management about their own
identification and assessment of the risks of irregularities;
-- any matters we identified having obtained and reviewed the
Company's documentation of their policies and procedures relating
to:
-- identifying, evaluating and complying with laws and
regulations and whether they were aware of any instances of
noncompliance;
-- detecting and responding to the risks of fraud and whether
they have knowledge of any actual, suspected or alleged fraud;
-- the internal controls established to mitigate risks of fraud
or non-compliance with laws and regulations;
-- the matters discussed among the audit engagement team
regarding how and where fraud might occur in the financial
statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities
and incentives that may exist within the organisation for fraud. In
common with all audits under ISAs (UK), we are also required to
perform specific procedures to respond to the risk of management
override.
We also obtained an understanding of the legal and regulatory
frameworks that the Company operates in, focusing on provisions of
those laws and regulations that had a direct effect on the
determination of material amounts and disclosures in the financial
statements. The key laws and regulations we considered in this
context included the Isle of Man Companies Act and local tax
legislation.
Audit response to risks identified
As a result of performing the above, our procedures to respond
to risks identified included the following:
-- reviewing the financial statement disclosures and testing to
supporting documentation to assess compliance with provisions of
relevant laws and regulations described as having a direct effect
on the financial statements;
-- enquiring of management concerning actual and potential litigation and claims;
-- performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;
-- reading minutes of meetings of those charged with governance;
-- obtained an understanding of provisions and held discussions
with management to understand the basis of recognition or
non-recognition of tax provisions; and
-- in addressing the risk of fraud through management override
of controls, testing the appropriateness of journal entries and
other adjustments; assessing whether the judgements made in making
accounting estimates are indicative of a potential bias; and
evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations
and potential fraud risks to all engagement team members including
internal specialists and significant component audit teams and
remained alert to any indications of fraud or noncompliance with
laws and regulations throughout the audit.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at:
https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx
This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state in an
auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members, as a body,
for our audit work, for this report, or for the opinion we have
formed.
Robert Wood (Senior Statutory Auditor)
For and on behalf of
Shipleys LLP
Chartered Accountants & statutory auditor
10 Orange Street
Haymarket
London
WC2H 7DQ
Date: 28 April 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2022
Notes Year ended Year ended 31 December
31 December 2021
2022 Restated
GBP GBP
CONTINUING OPERATIONS
Income:
Option fees received re licenses - 668,599
Interest receivable - -
Dividend receivable 2,951 691
Realised gain on sale of investments 4,320 -
Unrealised gain on investments (78,197) 100,391
Total Income
Administrative expenses (70,926) 769,681
Administrative expenses 4 (599,965) (291,690)
Listing related costs - (79,925)
Mining licenses and rights - -
Total Administrative Expense (599,965) (371,615)
----------------------------------------- ------ -------------------- -----------------------
OPERATING (LOSS)/PROFITFOR
THE YEAR (670,891) 398,066
Interest expense - (2,373)
Interest income 20 -
(LOSS)/PROFIT BEFORE TAX (670,871) 395,693
Taxation 7 - (122,222)
----------------------------------------- ------ -------------------- -----------------------
NET (LOSS)/PROFIT FOR THE
YEAR (670,871) 273,471
----------------------------------------- ------ -------------------- -----------------------
Other comprehensive income:
Other comprehensive income - -
(Loss)/Profit for the financial
year
Items that may be reclassified
to profit or loss:
Foreign currency reserve movement (32,256) 34,339
Total comprehensive (loss)/profit
for the financial year (703,127) 307,810
----------------------------------------- ------ -------------------- -----------------------
Attributable to:
Owners of the Company (703,127) 307,810
Non-controlling interest - -
(703,127) 307,810
-------------------- -----------------------
Basic loss per share 6 (0.35) p 0.24 p
----------------------------------------- ------ -------------------- -----------------------
Diluted loss per share 6 (0.29) p 0.120 p
----------------------------------------- ------ -------------------- -----------------------
All results are derived from
continuing operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2022
Notes Year ended 31 Year ended 31 December
December 2022 2021
Restated
GBP GBP
NON-CURRENT ASSETS
Exploration and evaluation
assets 10 5,112,856 4,432,962
Total Non-Current
Assets 5,112,856 4,432,962
CURRENT ASSETS
Trade and other receivables 11 11,023 21,722
Cash and cash equivalents 71,674 1,190,979
Available-for-sale
investments 8 395,750 502,456
Total Current Assets 478,447 1,715,157
TOTAL ASSETS 5,591,303 6,148,119
CURRENT LIABILITIES
Trade and other payables 12 (230,260) (83,949)
Taxation 7 (122,222) (122,222)
----------------------------- ------ --------------- -----------------------
Total Current Liabilities (352,482) (206,171)
NET CURRENT (LIABILITIES)
/ ASSETS 125,965 1,508,986
----------------------------- ------ --------------- -----------------------
NON-CURRENT LIABILITIES
Loans 13(i) - -
Total Non-Current
Liabilities - -
TOTAL LIABILITIES (352,482) (206,171)
----------------------------- ------ --------------- -----------------------
NET ASSETS 5,238,820 5,941,948
----------------------------- ------ --------------- -----------------------
EQUITY
Share capital 14 5,475,204 5,490,271
Warrant reserve 15 23,901 8,834
Foreign exchange
reserve 2,083 34,339
Retained earnings (949,716) (278,845)
4,551,472 5,254,600
----------------------------- ------ --------------- -----------------------
Non controlling interest 687,348 687,348
----------------------------- ------ --------------- -----------------------
TOTAL EQUITY 5,238,820 5,941,948
----------------------------- ------ --------------- -----------------------
The notes on pages 48-66 are an integral part of these financial
statements.
The financial statements of African Pioneer Plc (registered
number 008591V) were approved by the board on 28 April 2023 and
signed on its behalf by:
C Bird R Samtani
Executive Chairman Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2022
Share Capital Retained Foreign Warrant Non Total
capital contribution earnings exchange reserve Controlling equity
Restated reserve interest Restated
GBP GBP GBP GBP GBP GBP GBP
As at 1 January
2021 452,983 186,446 (552,315) - - - 87,114
---------- -------------- ----------- ---------- --------- ------------- ----------
Net proceeds from
shares issued 2,030,877 - - - - - 2,030,877
Acquisition of
subsidiaries 2,962,500 - - - - - 2,962,500
Acquisition of additional
15% of Manmar
subsidiaries 52,745 - - - 52,745
Loan notes converted
into shares - (186,446) - - - - (186,446)
Profit for the year - - 273,470 34,339 307,809
Share based payment
charge (8,834) - - - 8,834 - -
Non-controlling
interests on acquisition
of subsidiary - - - - - 687,348 687,348
--------------------------- ---------- -------------- ----------- ---------- --------- ------------- ----------
As at 31 December
2021
Restated 5,490,271 - ( 278,845) 34,339 8,834 687,348 5,941,947
--------------------------- ---------- -------------- ----------- ---------- --------- ------------- ----------
As at 1 January
2022 5,490,271 - ( 278,845) 34,339 8,834 687,348 5,941,947
--------------------------- ---------- ----------- --------- ------- -------- ----------
Profit / (Loss) for
the year - - (670,871) (32,256) (703,127)
Share based payment
charge (15,067) - - - 15,067 - -
Non-controlling interests
on acquisition of
subsidiary - - - - -
--------------------------- ---------- ----------- --------- ------- -------- ----------
As at 31 December
2022 5,475,204 - ( 949,716) 2,083 23,901 687,348 5,238,820
--------------------------- ---------- ----------- --------- ------- -------- ----------
The notes on pages 46-66 are an integral part of these financial
statements. For the year ended 31 December 2022
CONSOLIDATED STATEMENT OF CASH FLOWS
Notes Year ended Year ended
31 December 31 December
2022 2021
Restated
GBP GBP
CASH FLOW FROM OPERATIONS
Profit/(Loss) before taxation (670,871) 273,470
Adjustments for:
Interest received - -
Dividends received (2,951) (691)
(Gain) on disposal of investment shares (4,320) -
Loss/(Gain) in fair value of investment at
reporting date 8 78,197 (100,391)
Interest expense - -
Operating (loss) before movements in working
capital (599,945) 172,389
Decrease/(Increase in receivables) 10,699 (21,302)
Increase in payables 146,311 155,441
NET CASH OUTFLOW FROM OPERATING ACTIVITIES (442,935) 306,528
------------------------------------------------------ ------ ------------- -------------
TAXATION PAID
CASH FLOW FROM INVESTING ACTIVITIES
Interest received - -
Dividends received 2,951 691
Investments purchased - (302,960)
Investments sold 32,829 -
Purchases of Exploration and evaluation assets (679,894) (303,206)
Purchase of Exploration and Evaluation
assets on Acquisition of subsidiaries (427,163)
------------- -------------
NET CASH INFLOW FROM INVESTING ACTIVITIES (644,114) (1,032,638)
------------------------------------------------------ ------ ------------- -------------
CASH FLOW FROM FINANCING ACTIVITIES
Issue of convertible loan notes - -
Proceeds from Issue of shares, net of issue
costs - 1,844,431
Loan repayment - (49,143)
NET CASH INFLOW FROM FINANCING ACTIVITIES - 1,795,288
------------------------------------------------------ ------ ------------- -------------
Net increase/(decrease) in cash and cash equivalents
in the period 1,087,049 1,069,178
Effect of foreign exchange rate changes (32,256) 34,339
Cash and cash equivalents at the beginning
of the period 1,190,979 87,462
------------------------------------------------------ ------ ------------- -------------
Cash and cash equivalents at the end of the
period 71,674 1,190,979
------------------------------------------------------ ------ ------------- -------------
The notes on pages 48-66are an integral part of these financial
statements.
COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 December 2022
Notes 31 December 2022 31 December 2021
Restated
GBP GBP
NON-CURRENT
ASSETS
Investment in
subsidiaries 10 2,796,500 2,796,500
Total Non-Current
Assets 2,796,500 2,796,500
CURRENT ASSETS
Trade and other
receivables 11 1,557,828 866,342
Cash and cash
equivalents 71,664 1,190,969
Available-for-sale
investments 8 395,750 502,456
Total Current
Assets 2,025,242 2,559,767
TOTAL ASSETS 4,821,742 5,356,267
CURRENT LIABILITIES
Trade and other
payables 12 (689,809) (565,829)
Total Current
Liabilities (689,809) (565,829)
NET CURRENT
ASSETS / (LIABILITIES) 1,335,433 1,993,938
------------------------- ------ ----------------- -----------------
NON-CURRENT
LIABILITIES
Loans 13(i) - -
Total Non-Current
Liabilities - -
TOTAL LIABILITIES (689,809) (565,829)
------------------------- ------ ----------------- -----------------
NET ASSETS 4,131,933 4,790,438
------------------------- ------ ----------------- -----------------
EQUITY
Share capital 14 5,475,204 5,490,271
Warrant reserve 15 23,901 8,834
Retained earnings (1,367,172) (708,667)
----------------- -----------------
TOTAL EQUITY 4,131,933 4,790,438
----------------- -----------------
The notes on pages 46-66 are an integral part of these financial
statements.
The financial statements of African Pioneer Plc (registered
number 008591V) were approved by the board on 28 April 2023 and
signed on its behalf by:
C Bird R Samtani
Executive Chairman Director
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2022
Share capital Capital Retained Warrant Total
contribution earnings reserve equity
Restated Restated
GBP GBP GBP GBP GBP
As at 1 January
2021 452,983 186,446 (552,315) - 87,114
---------------- -------------- ---------- --------- ----------
Net proceeds from shares
issued 2,030,877 - - - 2,030,877
Acquisition of subsidiaries 2,962,500 - - - 2,962,500
Acquisition of additional
15% of Manmar subsidiaries 52,745 - - - 52,745
Loan notes converted
into shares - (186,446) - - (186,446)
Share based payment
charge (8,834) - - 8,834 -
Loss for the year - - (156,352) (156,352)
As at 31 December
2021 (Restated) 5,490,271 - (708,667) 8,834 4,790,438
------------------------- ---------------- -------------- ---------- --------- ----------
As at 1 January 2022 5,490,271 - (708,667) 8,834 4,790,438
------------------------ ---------- ------------ ------- ----------
Share based payment
charge (15,067) - - 15,067 -
(Loss) for the year - - (658,505) (658,505)
As at 31 December 2022 5,475,204 - (1,367,172) 23,901 4,131,933
------------------------ ---------- ------------ ------- ----------
The notes on pages 46-66 are an integral part of these financial
statements.
COMPANY STATEMENT OF CASH FLOWS
For the year ended 31 December 2022
Notes Year ended Year ended
31 December 31 December
2022 2021
Restated
GBP GBP
CASH FLOW FROM OPERATIONS
Profit/(Loss) before taxation (658,505) (156,352)
Adjustments for:
Interest received - -
Dividends received (2,951) (691)
(Gain) on disposal of investment shares (4,320) -
Loss/(Gain) in fair value of investment at
reporting date 8 78,197 (100,391)
Interest expense - -
Operating (loss) before movements in working
capital (587,579) (257,434)
Decrease/(Increase) in receivables 10,699 (20,559)
Increase/(decrease) in payables 146,305 (8,258)
Increase / (decrease) in loans to subsidiaries (724,510) 325,383
------------------------------------------------------ ------ ------------- -------------
NET CASH OUTFLOW FROM OPERATING ACTIVITIES (1,155,085) 39,132
------------------------------------------------------ ------ ------------- -------------
TAXATION PAID
CASH FLOW FROM INVESTING ACTIVITIES
Interest received - -
Dividends received 2,951 691
Investments purchased 8 - (302,960)
Investments sold 32,829 -
Acquisition of subsidiaries - (428,644)
- -
NET CASH INFLOW FROM INVESTING ACTIVITIES 35,780 (730,913)
------------------------------------------------------ ------ ------------- -------------
CASH FLOW FROM FINANCING ACTIVITIES
Issue of convertible loan notes - -
Proceeds from Issue of shares, net of issue
costs - 1,844,431
Loan repayment - (49,143)
NET CASH INFLOW FROM FINANCING ACTIVITIES - 1,795,288
------------------------------------------------------ ------ ------------- -------------
Net increase/(decrease) in cash and cash equivalents
in the period 1,119,305 1,103,507
Cash and cash equivalents at the beginning
of the period 1,190,969 87,462
------------------------------------------------------ ------ ------------- -------------
Cash and cash equivalents at the end of the
period 71,664 1,190,969
------------------------------------------------------ ------ ------------- -------------
The notes on pages 46-66 are an integral part of these financial
statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
1. GENERAL INFORMATION
This financial information is for African Pioneer Plc ("the
Company") and its subsidiary undertakings. The principal activity
of African Pioneer Plc (the 'Company') and its subsidiaries
(together the 'Group') is the development of natural resources
exploration projects in Sub-Saharan Africa.
The Company is a public limited company and was listed on to the
Official List (Standard Segment) and commenced trading on the Main
Market for listed securities of the London Stock Exchange on 1 June
2021. The Company is domiciled in the Isle of Man and was
incorporated on 20th July 2012 under the Isle of Man Companies Act
2006 with company registration number 00859IV, and with registered
address being 34 North Quay, Douglas, Isle of Man, IM1 4LB.
2. ACCOUNTING POLICIES
Basis of preparation
The financial statements have been prepared under the historical
cost convention except for the measurement of certain non-current
asset investments at fair value. The measurement basis and
principal accounting policies of the Group are set out below. The
financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board (IASB) and endorsed by the
European Union.
New and amended IFRS Standards that are effective for the
current year
A number of new standards and interpretations have been adopted
by the Group for the first time in line with their mandatory
adoption dates, but none are applicable to the Group and hence
there would be no impact on the financial statements.
New and revised IFRS Standards in issue but not yet
effective
At the date of approval of these financial statements, the Group
has not applied the following new and revised IFRS Standards that
have been issued but are not yet effective:
IFRS 17 (including Insurance Contracts
the June 2020 amendments
to IFRS 17)
IFRS 10 and IAS Sale or Contribution of Assets between an Investor
28 (amendments) and its Associate or Joint
Venture
---------------------------------------------------
Amendment to IFRS Covid rent concessions
16
---------------------------------------------------
IFRS 3 Conceptual framework
---------------------------------------------------
Amendments to IAS Classification of Liabilities as Current or
1 Non-current
---------------------------------------------------
Amendments to IFRS Reference to the Conceptual Framework
3
---------------------------------------------------
Amendments to IAS Property, Plant and Equipment-Proceeds before
16 Intended Use
---------------------------------------------------
Amendments to IAS Disclosure of Accounting Policies
1 and IFRS
Practice Statement
2
---------------------------------------------------
Amendments to IAS Definition of Accounting Estimates
8
---------------------------------------------------
Amendments to IAS Deferred Tax related to Assets and Liabilities
12 arising from a Single Transaction
---------------------------------------------------
Amendments to IAS1 Non-current liabilities with covenants
---------------------------------------------------
Amendments to IFRS Lease liability sale & leaseback
16
---------------------------------------------------
The directors do not expect that the adoption of the Standards
listed above will have a material impact on the financial
statements of the Company in future periods.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries). Control is achieved where the Company has power
over the investee, is exposed or has rights to variable returns
from its involvement with the investee and has the ability to use
its power to affect its returns.
The results of subsidiaries acquired or disposed of are included
in the consolidated Statement of Comprehensive Income from the
effective date of acquisition or up to the effective date of
disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used in
line with those used by other members of the Group.
All intragroup assets and liabilities, equity, income, expenses,
and cash flows relating to transactions between members of the
Group are eliminated in full on consolidation.
Profits/(losses) attributable to non-controlling interests are
shown separately in the Statement of Comprehensive income and the
portion of net assets attributable to non-controlling interest is
shown on the Statement of Financial Position.
Going concern
The Group made a loss from all operations for the year ended 31
December 2022 after tax of GBP(670,871) (2021: restated profit of
GBP273,471), On 2 October 2021 the Company entered into a two-year
option agreement with ASX listed Sandfire Resources Limited in
relation to 4 of its 8 Botswana prospecting licences whereby the
Company received a cash payment amounting to US$500,000 plus
107,272 Sandfire Resources Limited shares as part of the agreement
with Sandfire. As a result of the option fee received, the Company
made a profit for the year to 31 December 2021. During 2021, the
Company raised GBP1,750,000 at the time of its Listing on 1 June
2021and GBP365,000 by way of a share subscription from Sandfire
Resources Limited. Cash and cash equivalents were GBP71.7k as at 31
December 2022 and the Company had available for sale investments at
31 December 2022 of GBP396K. An operating loss is expected in the
year subsequent to the date of these accounts and as a result the
Company will need to raise funding to provide additional working
capital to finance its ongoing activities. The management team has
successfully raised funding for exploration projects in the past,
but there is no guarantee that adequate funds will be available
when needed in the future.
Based on its current reserves and the Board's assessment that
the Company will be able to raise additional funds, as and when
required, to meet its working capital and capital expenditure
requirements, the Board have concluded that they have a reasonable
expectation that the Group can continue in operational existence
for the foreseeable future. For these reasons the financial
statements have been prepared on the going concern basis, which
contemplates continuity of normal business activities and the
realisation of assets and discharge of liabilities in the normal
course of business.
The management team has successfully raised funding for
exploration projects in the past, but there is no guarantee that
adequate funds will be available when needed in the future.
There is a material uncertainty relating to the conditions above
that may cast significant doubt on the Group's ability to continue
as a going concern and therefore the Group may be unable to realise
its assets and discharge its liabilities in the normal course of
business.
This financial report does not include any adjustments relating
to the recoverability and classification of recorded assets amounts
or liabilities that might be necessary should the entity not
continue as a going concern.
Exploration assets accounting policy
The Company's exploration assets accounting policy is in line
with IFRS6. Exploration, evaluation and development expenditure
incurred is accumulated in respect of each identifiable area of
interest. These costs are only carried forward to the extent that
they are expected to be recouped through the successful development
of the area or where activities in the area have not yet reached a
stage which permits reasonable assessment of the existence of
economically recoverable reserves. Accumulated costs in relation to
an abandoned area are written off in full in the year in which the
decision to abandon the area is made. When production commences,
the accumulated costs for the relevant area of interest are
transferred to development assets and amortised over the life of
the area according to the rate of depletion of the economically
recoverable reserves. A regular review is undertaken of each area
of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest.
Valuation of investments
The company has adopted the provisions of IFRS9 and has elected
to treat all available for sale investments at fair value with
changes through the profit and loss.
Available-for-sale investments under IFRS9 are initially
measured at fair value plus incidental acquisition costs.
Subsequently, they are measured at fair value in accordance with
IFRS 13. This is either the bid price or the last traded price,
depending on the convention of the exchange on which the investment
is quoted. All gains and losses are taken to profit and loss.
Equity and reserves
An equity instrument is any contract that evidences a residual
interest in the assets of a company after deducting all of its
liabilities. Equity instruments issued are recorded at the proceeds
received net of direct issue costs.
Share capital represents the amount subscribed for shares with
no par nominal value. Any transaction costs associated with the
issuing of shares are deducted from share capital, net of any
related income tax benefits.
Foreign exchange reserve - amounts arising on re-translating the
net assets of overseas operations into the presentational
currency
The capital contribution reserve represents the value of the
equity component of loans made from parent undertakings.
The warrant reserve presents the proceeds from issuance of
warrants, net of issue costs. Warrant reserve is non-distributable
and will be transferred to share capital account and accumulated
losses upon exercise of warrants. Shares to be issued reserve
arises on the timing difference between the Company making a
commitment to issue shares and the shares being issued. Once the
shares are issued a transfer is made to the share capital account.
Accumulated losses include all current and prior period results as
disclosed in the statement of comprehensive income, less dividends
paid to the owners of the parent.
Significant management judgement in applying accounting policies
and estimation uncertainty
When preparing the financial statements, management makes a
number of judgements, estimates and assumptions about the
recognition and measurement of assets, liabilities, income and
expenses.
Functional and presentational currency
The presentation and functional currency of the Company is
Sterling.
Expenses
All expenses are accounted for on an accruals basis. Expenses
are charged to the statement of comprehensive income except for
expenses incurred on the acquisition of an investment, which are
included within the cost of that investment, expenses arising on
the disposal of investments are deducted from the disposal
proceeds.
Cash and cash equivalents
This consists of cash held in the Company's bank account.
Financial liabilities
The Company has financial liabilities consisting of trade
payables and accrued expenses which are non-derivative financial
liabilities recognised at amortised cost.
Taxation
The Company is subject to tax in the Isle of Man in the period
at a rate of 0% and accordingly, interest and gains payable to the
Company are received by the Company without any deduction relating
to Isle of Man taxed. and during the period the Company had no
income subject to taxation in other jurisdictions, As per Note 16
the Company has made a prior year adjustment in respect of
provision for tax due by a subsidiary of GBP122,222.
Earnings per share
The earnings per share are calculated by dividing the net result
attributed to the equity shareholders by the weighted average
number of participating shares in issue in the period.
Geographical segments
A segment is a distinguishable component of the Company that is
engaged either in providing products or services (business segment)
or in providing products or services within a particular economic
environment (geographical segment), which is subject to risk and
rewards that are different from those of other segments. The
internal management reporting used by the chief operating decision
maker consists of one segment. Hence in the opinion of the
directors, no separate disclosures are required under IFRS 8. The
Company's revenue in the year is not material and consequently no
geographical segment information has been disclosed.
Critical accounting estimates and judgements
The preparation of the Group's financial statements under IFRS
requires the Directors to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities. Estimates and
judgements are continually evaluated and are based on historical
experience and other factors including expectations of future
events that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates.
Details of the Group's significant accounting judgements used in
the preparation of these financial statements include:
Recoverability of intangible exploration and evaluation
assets
Where a project is sufficiently advanced, the recoverability of
intangible exploration and evaluation assets is assessed by
comparing the carrying value to internal and operator estimates of
the net present value of projects. Intangible exploration assets
are inherently judgemental to value. The amounts for intangible
exploration and evaluation assets represent active exploration
projects. These amounts will be written-off to the profit and loss
as exploration costs unless commercial reserves are established, or
the determination process is completed and there are no indications
of impairment. The carrying value of exploration assets in the
consolidated financial statements as at 31 December 2022 is
GBP5,112,856. The recoverability of this carrying value, and thus
potential impairment, requires use of significant judgments and
estimates. The details of these assets are outlined in note 10.
Recoverability of investment in subsidiaries and intragroup
receivables
In the Company financial statements, the carrying value of the
Company's investment in subsidiaries and intragroup receivables is
GBP4,344,048. The recoverability of this balance is driven by the
same judgements and uncertainties as the recoverability of the
exploration and evaluation assets held by the subsidiaries.
Valuation of share-based payments
Equity-settled share-based payment transactions with parties
other than employees are measured at the fair value of the goods or
services received, except where that fair value cannot be estimated
reliably, in which case they are measured at the fair value of the
equity instruments granted, measured at the date the entity obtains
the goods or the counterparty renders the service. The share-based
payment expense is recognised as deduction in share capital. A
corresponding increase in the warrant reserve is also recognised
The fair value of these payments is calculated by the Company using
the Black Scholes option pricing model. The model requires the
Directors to make assumptions regarding the share price volatility,
risk free rate and expected life of awards in order to determine
the fair values of the awards at grant dates.
3. FINANCIAL RISK MANAGEMENT
The Company's objective is to achieve capital growth through
investing in selection of equity and other instruments. The
Company's financial instruments comprise:
-- Available-for-sale investments
-- Cash, short-term receivables and payables
Throughout the period under review, it was the Company's policy
that no trading in derivatives shall be undertaken. The main
financial risks arising from the Company's financial instruments
are market price risk and liquidity risk. The
Board regularly reviews and agrees policies for managing each of
these risks and they are summarised below. These policies have
remained constant throughout the period.
Market risk
Market risk consists of interest rate risk, foreign currency
risk and other price risk. There are no foreign currency exposures.
Hence, no foreign currency risk. It is the Board's policy to
maintain an appropriate spread of investments in the portfolio
whilst maintaining the investment policy and aims of the Company.
The Investment Committee actively monitors market prices and other
relevant information throughout the year and reports to the Board,
who is ultimately responsible for the Company's investment
policy.
Interest rate risk
Changes in interest rates would affect the Company returns from
its cash balances. A floating rate of interest, which is linked to
bank base rates, is earned on cash deposits. The exposure to cash
flow interest rate risk at 31 December 2022 for the Company was GBP
71,674 (2021: GBP1,190,969). As the Company does not have any
borrowings and finances its operations through its share capital
and retained revenues, it does not have any interest rate risk
except in relation to cash balances.
Other price risk
Other price risk which comprises changes in market prices other
than those arising from interest rate risk or currency risk may
affect the value of quoted and unquoted equity investments. The
Board of directors manages the market price risks inherent in the
investment portfolio by regularly monitoring price movements and
other relevant market information. The Company accounts for
movements in the fair value of its available-for-sale financial
assets in other comprehensive income. A 5% change in prices of
investments would result in increase/(decrease) of GBP19,780 in
value of investments (2021: GBP25,123).
Liquidity risk
The Company maintains appropriate cash reserves and the majority
of the Company's assets comprise of realisable securities, most of
which can be sold to meet funding requirements, if necessary. Given
the Company's cash reserves, it has been able to settle all
liabilities on average within 1 month. Given the current level of
cash resources the liquidity risk is not considered to be
material.
Credit risk
Credit risk is the risk of financial loss to the Company if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations.
The carrying amount of financial assets represents the maximum
credit exposure. The maximum exposure to credit risk as at 31
December 2022 is detailed below:
For the Group, credit risk arises primarily from cash balances
held at banks. The risk is mitigated by using only reputable
financial institutions with a high credit rating.
The Company is additionally exposed to credit risk on the
intercompany balances with its subsidiaries. The recoverability of
these balances is linked directly to the success of the exploration
activities of the Group.
As discussed in note 10, no impairment indicators exist on the
exploration assets and thus the balances are deemed to be
recoverable. The Company and Group do not hold any collateral as
security
The credit rating bands are provided by independent ratings
agencies:
As at 31 December 2022 Not rated /not Total
readily available
Cash and cash equivalents 71,674 71,674
Total assets subject to
credit risk 71,674 71,674
------------------- -------
As at 31 December 2021 Not rated /not Total
readily available
Cash and cash equivalents 1,190,969 1,190,969
Total assets subject to
credit risk 1,190,969 1,190,969
------------------- ----------
Financial liabilities
There are no currency or interest rate risk exposures on
financial liabilities as they are denominated in GBP Sterling.
Capital management
The Company actively reviews its issued share capital and
reserves and manages its capital requirements in order to maintain
an efficient overall financing structure whilst avoiding any
leverage.
4. EXPENSES BY NATURE
31 December 31 December
2022 2021
Directors' fees 5 (172,404) (106,469)
Audit fees (49,200) (32,220)
Stock exchange related costs (52,073) (14,813)
Legal, professional and
consultancy fees (96,319) (39,359)
Consultancy fees (106,500) (25,000)
Management services (10,800) (11,800)
Insurance (20,146) (14,521)
Other administration expenses (46,784) (13,321)
Travel (7,999) -
Investor relations (37,740) (34,187)
-------------------------------------------------------- ------ ------------ --------------------
Total Expense (599,965) (291,690)
-------------------------------------------------------- ------ ------------ --------------------
31 December 31 December 2021
2022
GBP GBP
Auditor's remuneration
* Audit of the financial statements of the Company 49,200 32,220
------------ -----------------
5. DIRECTORS' EMOLUMENTS
Other than directors, there were no employees or key management
personnel in the year.
31 December 31 December
2022 2021
GBP GBP
Colin Bird 60,000 35,000
Raju Samtani 50,004 29,169
Christian Cordier 30,000 16,500
Kjeld Thygesen 18,000 16,500
James Cunningham-Davis 14,400 9,300
------------ ------------
Total 172,404 106,469
------------ ------------
The emoluments paid to the directors relate to both the Company
and the Group
2022 2021
Number Number
Directors 5 4
Consultants 1 1
The average monthly number
of employees 6 5
6. EARNINGS PER SHARE
31 December 2022 31 December 2021
Restated
Profit/(Loss) after tax for the GBP(670,871) GBP273,471
purposes of earnings per share
attributable to equity shareholders
Weighted average number of shares 191,707,845 116,222,201
Weighted average number of shares
and warrants 229,430,220 138,235,532
Basic profit/(loss) per ordinary
share (0.35) p 0.24 p
Diluted profit per ordinary share (0.29) p 0.20 p
The use of the weighted average number of shares in issue in the
period recognises the variations in the number of shares throughout
the period and is in accordance with IAS 33.
7. TAXATION
The Company is subject to Isle of Man income tax at 0%, and
during the period had no income subject to taxation in other
jurisdictions, and has no capital allowances or deferred tax
implications. Accordingly, the Directors have made no provision for
taxation charges or liabilities for the period and have not
presented the formal reconciliation required under IAS 12. As per
Note 16 the Company has made a prior year adjustment in respect of
provision for tax due by a subsidiary of GBP122,222.
8. AVAILABLE FOR SALE INVESTMENTS
Group & Company Group & Company
31 December 2022 31 December 2021
GBP GBP
Investments at fair value
at 1 January 502,456 99,105
Additions - 302,960
Disposals (28,509) -
Movements in fair value (78,197) 100,391
Investments at fair value
at 31 December 395,750 502,456
----------------- -----------------
The book cost of the investments at 31 December 2022 was
GBP381,541 (2021: GBP410,050).
The Company's intention following its Listing is not to purchase
any new investments and to hold its residual portfolio as
realisable investments as a source of liquidity to cover
explorations costs and general overheads of the Company.
Financial instruments measured at fair value
The following table presents financial assets and liabilities
measured at fair value in the statement of financial position in
accordance with the fair value hierarchy. This hierarchy groups
financial assets and liabilities into three levels based on the
significance of inputs used in measuring the fair value of the
financial assets and liabilities. The fair value hierarchy has the
following levels:
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
- Level 2: inputs other than quoted prices included within Level
1 that are observable for the asset or liability, either directly
(i.e., as prices) or indirectly (i.e., derived from prices);
and
- Level 3: inputs for the asset or liability that are not based
on observable market data (unobserved inputs).
The level within which the financial asset or liability is
classified is determined based on the lowest level of significant
input to the fair value measurement.
The financial assets and liabilities measured at fair value in
the statement of financial position are grouped into the fair value
hierarchy as follows:
Level 1 Level 2 Level 3 Total
31 December 2022 GBP GBP GBP GBP
Assets 395,750 - 395,750
Total 395,750 - 395,750
Level 1 Level 2 Level 3 Total
GBP GBP GBP GBP
31 December 2021
Assets 502,456 - 502,456
Total 502,456 - 502,456
9. ACQUISITION OF SUBSIDIARIES
Acquisition of Zamcu Exploration Pty Limited (Namibian Projects)
On 1 June 2021 the Company completed the acquisition of 100% of Zamcu
Exploration Pty Ltd ("Zamcu"), which via its subsidiaries, held a 70
per cent. interest in two Namibian Exclusive Prospecting Licenses ("EPLs")
comprising the Ongombo and Ongeama projects, located within the Matchless
amphibolite Belt of central Namibia that hosts copper-gold mineralisation.
On 27 August 2021 the Company entered into an agreement to acquire
a further 15% interest in its Ongombo Project and Ongeama Project in
Namibian (the "Namibian Projects") increasing its interest in the Namibian
Projects to 85% (see note 10)
The fair value of the assets and liabilities acquired were as follows:
GBP
Consideration
Equity consideration
* Ordinary shares (issued) 687,500
Cash consideration 149,149
------------
836,649
Fair value of assets and liabilities
acquired
-
* Assets
* Liabilities (262)
------------
(262)
Deemed fair value of
exploration assets acquired 836,911
Additional 15% acquired 331,240
------------
Total 85% acquisition value 1,168,151
Attributable to non-controlling
interest 206,098
Gross fair value of exploration
assets acquired 1,374,249
------------
Acquisition of African Pioneer Zambia Limited ("APZ") (Zambia Projects)
On 1 June 2021 the Company completed the acquisition of 80% of APZ,
which holds a 100 per cent. interest in five Zambian Prospecting Licenses
(PLs) located in two areas namely (i) the Central Africa Copperbelt
(Copperbelt), which is the largest and most prolific mineralized sediment-
hosted copper province known on Earth and which comprises four PLs
and (ii) the Zambezi area located within the Zambezi Belt of southern
Zambia that hosts a lower Katanga Supergroup succession which, although
less studied than its northern counterpart, also hosts a number of
Copperbelt-style occurrences and which comprises one PL
The fair value of the assets and liabilities acquired were as follows:
GBP
Ordinary shares (issued) 1,925,000
Fair value of assets and liabilities
acquired
* Assets 743
* Loan for exploration licenses (41,205)
------------
- (40,462)
Deemed fair value of
* exploration assets acquired 1,965,462
------------
Attributable to non-controlling
interest 481,250
Gross fair value of exploration
assets acquired 2,446,712
============
Resource Capital Partners Pty Ltd ("RCP") (Botswana Projects )
On 1 June 2021 the Company completed the acquisition of 100% of Resource
Capital Partners Pty Ltd ("RCP"), which holds a 100 per cent. interest
in eight Botswana Prospecting Licenses ("PLs") located in two areas
namely (i) the Kalahari Copperbelt (KC) that contains copper-silver
mineralisation and which is generally stratabound and hosted in metasedimentary
rocks that have been folded, faulted and metamorphosed to greenschist
facies during the Damara Orogeny and which comprises six PLs and (ii)
the Limpopo Mobile Belt ("Limpopo") set within the Motloutse Complex
of eastern Botswana, a transitional boundary between the Zimbabwe Craton
to the north and the Limpopo Mobile Belt to the south which comprises
two Pls;
The fair value of the assets and liabilities acquired were as follows:
GBP
Consideration
Equity consideration
* Ordinary shares (issued) 350,000
Fair value of assets and liabilities
acquired
-
* Assets
-
* Liabilities
--------------
-
Deemed fair value of
exploration assets acquired 350,000
==============
10. EXPLORATION AND EVALUATION ASSETS
Group Company Group Company
Exploration Exploration
and evaluation Investment and evaluation Investment
assets in subsidiary assets in subsidiary
31 December 31 December 31 December 31 December
2022 2022 2021 2021
GBP GBP GBP GBP
Balance at beginning 4,432,962
of period - 2,796,500 -
Acquisitions during
the period
* Namibia Projects (note 9) 1,374,249 521,500
* Zambia Projects (note 9) 2,446,712 1,925,000
* Botswana Projects (note 9) 350,000 350,000
Exploration expenditure
- 679,894 - 262,001 -
Carried forward
at end of year 5,112,856 2,796,500 4,432,962 2,796,500
================ ================== ================ ================
Investments in subsidiaries are recorded at cost, which is the
fair value of the consideration paid less impairment.
The Company conducted an impairment review and is satisfied that
the carrying value of GBP2,796,500 is reasonable and no impairment
is necessary. (2021- Nil).
The Company's principal business is to explore opportunities
within the natural resources sector in Sub-Saharan Africa, with a
focus on base and precious metals including but not limited to
copper, nickel, lead and zinc. The Company acquired the Namibia
Projects, Zambia Projects and Botswana Projects in 2021 (see Note 9
for details):
No current JORC 2012 compliant Mineral Resources exist for the
Zambia and Botswana Projects and no Mineral Reserve estimates have
been completed for the Zambia and Botswana Projects.
The Company's' main focus following Admission is on evaluating
and advancing the Namibian and Zambian Projects as the Botswana
Projects are the subject of option agreements .
Principal Subsidiaries
Proportion
Country of of equity
Name & registered office incorporation Nature shares held
address and residence of business by Company
Resource Capital Partners
Pty Ltd
Plot 102, Unit 13
Gaborone International Commerce
Park, Base Metals
Gaborone, Botswana Botswana Exploration 100%
----------------- -------------- --------------
African Pioneer Zambia Ltd
Plot No397/0/1
Chipwenupwenu Road
Makeni, Lusaka Base Metals
PO Box 34033, Zambia Zambia Exploration 80%
----------------- -------------- --------------
Zamcu Exploration Pty Ltd
5 Eze Terrace
Hillarys
WA, 6025 Holding
AUSTRALIA Australia Company 100%
----------------- -------------- --------------
Manmar investments one hundred Namibia Base Metals 85% via Zamcu
and twenty nine Pty Ltd Exploration
36 Simeon Kambo Shixungileni
Street,
Windhoek, Namibia
---------------- --------------- --------------
Manmar investments one hundred Namibia Base Metals 85% via Zamcu
and thirty six Pty Ltd Exploration
36 Simeon Kambo Shixungileni
Street,
Windhoek, Namibia
---------------- --------------- --------------
11. TRADE AND OTHER RECEIVABLES
Group Company Group Company
31 December 31 December 31 December 31 December
2022 2022 2021 2021
Restated
GBP GBP GBP GBP
Loans to subsidiaries
* - 1,547,548 - 845,363
Prepayments 10,280 10,280 20,979 20,979
Other debtors 743 - 743 -
Total 11,023 1,557,828 21,722 866,342
------------ ------------ ------------ ------------
* Loans to subsidiaries are interest free and payable on
demand.
Group Receivables and other current assets are all due within
one year. The fair value of all receivables is the same as their
carrying values stated above.
12. TRADE AND OTHER PAYABLES
Group Company Group Company
31 December 31 December 31 December 31 December
2022 2022 2021 2021
Restated
GBP GBP GBP GBP
Creditors 138,510 138,510 4,846 4,846
Accrued expenses 50,267 50,267 37,626 37,626
Loans from subsidiaries 501,032 523,357
Other creditors 278 - 272 -
Loan from directors 41,205 - 41,205 -
Total 230,460 689,809 83,949 565,829
------------ ------------ ------------ ------------
Carrying amounts of trade and other payables approximate their
fair value.
14. CALLED UP SHARE CAPITAL
The share capital of African Pioneer Plc consists only of fully
paid ordinary shares with no par value. All shares are equally
eligible to receive dividends and the repayment of capital and
represent one vote at shareholders' meetings of the Company.
Number GBP
Authorised:
1,000,000,000 ordinary shares 1,000,000,000 n/a
of no par value
======================== ==================
2022 2021
Issued equity share Number GBP Number GBP
capital
--------------------- ------------ ---------- ------------ ----------
Is sued and fu l
ly pa id
Ordinary shares 191,707,845 5,946,610 191,707,845 5,946,610
============ ========== ============ ==========
Number Share
Group and Company of shares capital
GBP
-------------------------------- ----------- ---------
As at 1 January 2022 191,707,849 5,490,271
Shares issued during the period - -
Share issue costs * - =
Share based payment charge (15,067)
----------- ---------
As at 31 December 2022 191,707,849 5,475,204
----------- ---------
25,000,000 two year warrants were issued to the placees on 1
June 2021 exercisable at 5.25p per ordinary share
8,571,428 three year warrants were issued to Sanderson Capital
LLP on 1 June 2021 exercisable at 3.5p per ordinary share
A further 4,150,947 warrants were issued on 1 June 2021 for
services carried out as detailed in note 15.
15. WARRANTS AND SHARE BASED PAYMENT
On 1 June 2021 the Company granted the following warrants for
services carried out in relation to the listing of the Company on 1
June 2021 on the Standard Listing on the Official List trading on
the Main Market of the London Stock Exchange.
To Number Date granted Exercise Expiry Vesting conditions
price
Novum Securities 1 June
Ltd 2,500,000 01/06/2021 3.5p 24 upon being granted
Quantum Capital and 1 June
Consulting Ltd 1,420,947 01/06/2021 3.5p 24 upon being granted
1 June
Cavendish Trust 230,000 01/06/2021 3.5p 23 upon being granted
----------
4,150,947
As a result of this the fair value of the share options was
determined at the date of the grant using the Black Scholes model,
using the following inputs:
Share price at the date of amendment 3.5p
Strike price 3.5p
Volatility 50%
Expected life 2/3 years
Risk free rate 0.17%
The 50% volatility rate is based on the average volatility from
historical data in this sector
The share-based payment charge for these warrants for the year
to 31 December 2022 was GBP15,067, which has been taken to the
share-based payment reserve and the resultant fair value of the
warrants as at 31 December 2022 was determined to be GBP23,901
(2021: GBP8,834).
16. PRIOR PERIOD ADJUSTMENT
The Company is restating it's statement of Comprehensive Income
and Financial Position as at 31st December 2021 as during this
period the Company's income was overstated by GBP555,556 and the
Group's net profit after taxation was overstated by GBP122,222. The
Company overstatement of income arose as a result of a subsidiary's
income being attributed to the Company so did not affect the
Group's Comprehensive Income for the period. The Group's
overstatement of net profit after taxation arose due to a provision
of GBP122,222 for taxation by one of the Group's subsidiaries, For
Company the effect was that net assets were lower by GBP555,556 and
for the group the effect was net assets were lower by
GBP122,222.
17. RELATED PARTY TRANSACTIONS
Cavendish Trust Company Limited (CTC) provides company
administration and secretarial services to the Company on normal
commercial terms as part of their normal business activity. As such
it is not normally treated as a related party. Fees paid to CTC
during the year include GBP14,400 (2021: GBP9,300), relating to
director's fees for the services of J. Cunningham-Davis, a director
of CTC. At the year-end a balance of GBP10,800 (2021: GBPNil), was
outstanding.
Lion Mining Finance Limited, a company in which Colin Bird is
director and shareholder, has provided financial and technical
services to the Company amounting to GBP10,800 plus VAT in the year
(2021 - GBP10,800 plus VAT). At the year-end a balance of GBPNil
(2021: GBPNil) was outstanding. The Board considers this
transaction to be on normal commercial terms and on an arm's length
basis.
In October 2020 a loan of US$ 54,940 (GBP41,250) was advanced to
African Pioneer Zambia Ltd jointly by Colin Bird (US$ 27,470) and
Raju Samtani (US$ 27470) in order to acquire certain licenses
Intragroup Loans
Loan due from / (due to) balances with group companies at the
end of the year are as follows. Loans are interest free and
repayable on demand.
2022 2021
Restated
GBP GBP
---------- ----------
Zamcu Exploration Pty Ltd to
African Pioneer Plc 1,414,900 749,952
---------- ----------
Resource Capital Partners Pty
Ltd to African Pioneer Plc (501,032) (523,357)
---------- ----------
African Pioneer Zambia Ltd to
African Pioneer Plc 123,817 95,411
---------- ----------
Issue of shares at the IPO as disclosed in the Prospectus
(a) The Company entered into a Share Purchase Agreement, dated
29 October 2020 ("Zamcu SPA") with Tonehill Pty Ltd, Coreks Super
Pty Ltd and Breamline Pty Limited ("Zamcu Sellers") under which the
Zamcu Sellers (which are controlled by Christian Cordier) agreed to
sell to the Company their collective 100 per cent. ownership
interests in Zamcu in return for 10,000,000 shares issued at the
IPO with an issue price of 3.5 pence per share in the Company
("Consideration Shares"). The sale is subject to a 12 month lock-in
during which the Zamcu Sellers are not permitted to sell their
Consideration Shares in the Company, followed by a 12 month orderly
markets period during which the Zamcu Sellers are required to work
with the Company's broker for 30 days prior to making any sale.
(b) The Company entered into a Share Purchase Agreement, dated
29 October 2020 ("RCP SPA") with M&A Wealth Pty Ltd and
Breamline Pty Limited (a company controlled by Christian Cordier)
("RCP Sellers") under which the RCP Sellers agreed to sell to the
Company their collective 100 per cent. ownership interests in RCP
in return for 10,000,000 Consideration Shares in the Company issued
at the IPO, of which each RCP Seller received 5,000,000
Consideration Shares. The sale is subject to a 12 month lock-in
during which the RCP Sellers are not permitted to sell their
Consideration Shares in the Company, followed by a 12 month orderly
markets period during which sellers are required to work with the
Company's broker for 30 days prior to making any sale.
(c) The Company entered into a Share Purchase Agreement, dated
25 November 2020 ("APZ SPA") with Raju Samtani, Colin Bird, Mohamad
Ahmad, Caleb Amos Mulenga, Lukonde Makungu and Camden Park Trading
(a company controlled by Colin Bird) ("AP Zambia Sellers") under
which the AP Zambia Sellers agreed to sell to the Company their
collective 80 per cent. ownership interests in African Pioneer
Zambia Pty Limited ("AP Zambia") in return for 55,000,000
Consideration Shares in the Company issued at the IPO, in
proportion to their existing holdings of which 15,000,000
Considerations Shares were issued to each of Colin Bird and Raju
Samtani and 5,000,000 Consideration Shares were issued to Camden
Park Trading. The sale is subject to a 12 month lock-in during
which the AP Zambia Sellers are not permitted to sell their
Consideration Shares in the Company, followed by a 12 month orderly
markets period during which sellers are required to work with the
Company's broker for 30 days prior to making any sale.
2. Directors' Letters of Appointment and Service Agreements as
disclosed in the Prospectus
(a) Pursuant to an agreement dated 24 May 2021, the Company
renewed the appointment of James Cunningham-Davis as a Director.
The appointment continues unless terminated by either party giving
to the other 3 months' notice in writing. James Cunningham-Davis is
entitled to director's fees of GBP12,000 per annum for being a
director of the Company plus reasonable and properly documented
expenses incurred during the performance of his duties which will
be invoiced by Cavendish Trust Company Ltd an Isle of Man Trust
Company that James Cunningham-Davis is a founder and managing
director of. James Cunningham-Davis is not entitled to any pension,
medical or similar employee benefits. The agreement replaces all
previous agreements with James Cunningham-Davis and/or Cavendish
Trust Company Ltd in relation to the appointment of James
Cunningham-Davis as a director of the Company.
(b) Pursuant to an agreement dated 24 May 2021, the Company
appointed Kjeld Thygesen as a non-executive Director with effect
from the date of the IPO. The appointment continues unless
terminated by either party giving to the other 3 months' notice in
writing and Kjeld Thygesen is entitled to director's fees of
GBP18,000 per annum for being a director of the Company plus
reasonable and properly documented expenses incurred during the
performance of his duties. Kjeld Thygesen is not entitled to any
pension, medical or similar employee benefits.
(c) Pursuant to an agreement dated 24 May 2021, the Company
renewed the appointment of Colin Bird as a Director. The
appointment continues unless terminated by either party giving to
the other 3 months' notice in writing. Colin Bird is entitled to
director's fees of GBP18,000 per annum for being a director of the
Company plus reasonable and properly documented expenses incurred
during the performance of his duties. Colin Bird is not entitled to
any pension, medical or similar employee benefits. The agreement
replaces all previous agreements with Colin Bird in relation to his
appointment as a director of the Company.
(d) Pursuant to a consultancy agreement dated 24 May 2021, the
Company has, with effect from the date of the IPO, appointed Colin
Bird as a consultant to provide technical advisory services in
relation to its current and future projects including but not
limited to assessing existing geological data and studies, existing
mine development studies and developing exploration programs and
defining the framework of future geological and mine study reports
(the "Colin Bird Services"). The appointment continues unless
terminated by either party giving to the other 3 months' notice in
writing. Colin Bird is entitled to fees of GBP3,500 per month for
being a consultant to the Company plus reasonable and properly
documented expenses incurred during the performance of the Colin
Bird Services.
(e) Pursuant to an agreement dated 24 May 2021, the Company
renewed the appointment of Raju Samtani. The appointment continues
unless terminated by either party giving to the other 3 months'
notice in writing. Raju Samtani is entitled to director's fees of
GBP18,000 per annum for being a director of the Company plus
reasonable and properly documented expenses incurred during the
performance of his duties. Raju Samtani is not entitled to any
pension, medical or similar employee benefits. The agreement
replaces all previous agreements with Raju Samtani in relation to
his appointment as a director of the Company.
(f) Pursuant to a consultancy agreement dated 24 May 2021, the
Company has ,with effect from the date of Admission, appointed Raju
Samtani as a financial consultant to provide financial advisory
services to the Company (the "Raju Samtani Services"). The
appointment continues unless terminated by either party giving to
the other 3 months' notice in writing. Raju Samtani is entitled to
fees of GBP2,667 per month for being a consultant to the Company
plus reasonable and properly documented expenses incurred during
the performance of the Raju Samtani Services.
(g) Pursuant to an agreement dated 24 May 2021, the Company
appointed Christian Cordier as a Director with effect from the date
of Admission. The appointment continues unless terminated by either
party giving to the other 3 months' notice in writing. Christian
Cordier is entitled to director's fees of GBP18,000 per annum for
being a director of the Company plus reasonable and properly
documented expenses incurred during the performance of his duties.
Christian Cordier is not entitled to any pension, medical or
similar employee benefits.
(h) Pursuant to a consultancy agreement dated 24 May 2021, with
Mystic Light Pty Ltd a personal service company of Christian
Cordier the Company has secured the services of Christian Cordier,
with effect from the date of the IPO, as a business development
consultant to provide business development l advisory services to
the Company in relation to its existing and future projects (the
"Christian Cordier Services"). The appointment continues unless
terminated by either party giving to the other 3 months' notice in
writing. Mystic Light Pty Ltd is entitled to fees of GBP1,000 per
month for providing the Christian Cordier Services plus reasonable
and properly documented expenses incurred during the performance of
the Christian Cordier Services.
18. POST BALANCE SHEET EVENTS
On 24 January 2023 the Company announced that pursuant to the
Executive Share Option Scheme approved at the Company's Annual
General Meeting ("AGM") held on 23 August 2022 16,850,000 options
over Ordinary Shares ("Options") were awarded, 6,600,000 of the
Options were awarded to directors of the Company, as detailed below
and the balance of 10,250,000 Options to other eligible
participants. The Company had not previously issued any
Options.
Summary of the Options awarded :
Total number of A total of 16,850,000 Options have been awarded.
options:
Exercise prices All the Options have an exercise price of 4.5 pence
& award date: per Ordinary Share and vested on issue.
Purpose of options: To incentivise and retain directors, officers, consultants
and employees critical to enhancing the future market
value of the Company and have been issued at a significant
premium to the 30 day volume weighted average share
price ("VWAP") when the Options were approved.
30 day VWAP when The 30 day VWAP to 23 January 2023, being the latest
Options approved: practicable date prior to the approval of the Options
by the Company's Remuneration Committee and Board,
was 2.945 pence per share.
Prevailing share The Company's mid-market closing share price on 23
price: January 2023, being the latest practicable date prior
to the announcement of the Options, was 3.3 pence.
Exercise prices Premium to:
versus abovementioned
VWAP and prevailing
share price:
---------------------------
Prevailing 30 day
closing VWAP
share price
Exercise price of
4.5 pence 36% 53%
Life of Options: The options expire on 23 January 2033 being the date
one day prior to the tenth anniversary of the award
of the Options.
Exercise period: The Options can be exercised any time after vesting
and prior to their scheduled expiry and must be exercised
within 6 months of an option holder leaving the Company
or within 12 months of the death of an option holder.
Options awarded Directors No. of Options
to the Directors Executive Directors:
Colin Bird Executive Chairman 5,000,000
Christian Cordier Commercial
Director 500,000
Raju Samtani Finance Director 600,000
Non Executive Directors:
Kjeld Thygesen Independent 500,000
James Cunningham-Davis Nil
Total Directors 6,600,000
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END
FR SEWFWAEDSESL
(END) Dow Jones Newswires
April 28, 2023 13:17 ET (17:17 GMT)
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